Moody's shifts K-Mac outlook to stable

Moody's Investors Service said it changed the outlook to stable from negative and affirmed the B3 corporate family rating and B3-PD probability of default rating of K-Mac Holdings Corp. Also, Moody's affirmed K-Mac's B2 first-lien senior secured bank facility ratings and Caa2 second-lien senior secured bank facility rating.

“The affirmation and outlook change to stable reflects K-Mac's positive operating performance despite ongoing government restrictions imposed as a result of the coronavirus pandemic, and Moody's expectation for further growth over the next twelve months as government restrictions continue to ease and consumers increase their spending on food-away from home. K-Mac's restaurant portfolio is comprised of Taco Bell restaurants, which boast a solid track record of same store sales growth, and its drive through capabilities have helped more than offset the in-store dining restrictions,” the agency said in a press release.

Moody’s noted K-Mac’s debt-to-EBITDA declined to around 5x at year-end 2020 from 6x at year-end 2019.

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