Moody’s gives B1 to Checkers facilities

Moody's Investors Service said it assigned a B1 rating to Checkers Holdings, Inc.'s proposed $192.5 million senior secured first-lien term loan and $25 million first-lien revolver.

In addition, the agency assigned the company a B3 corporate family rating and B3-PD probability of default rating.

The outlook is stable.

Proceeds from the proposed $192.5 million first-lien term loan along with proceeds from an $87.5 million second-lien term loan (unrated) and $254 million of contributed equity from Oak Hill Capital Partners and management will be used to finance the acquisition of Checkers Drive-In Restaurants, Inc. for about $525 million.

Moody’s said the B3 corporate family rating reflects Checkers’ high leverage and modest interest coverage pro forma for the proposed transaction with leverage on a debt to EBITDA basis of about 6.8 times and EBIT coverage of interest of around 1.27 times for the LTM period ending Dec. 31, 2016.

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