Moody’s downgrades GPS

Moody’s Investors Service said it downgraded GPS Hospitality Holding Co. LLC’s corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and first-lien senior secured bank facility to Caa1 from B3. The outlook is negative.

“The downgrade reflects the expectation for a material deterioration in earnings, cash flow and credit metrics that are driven by the restrictions and closures across GPS’ restaurant base due to efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments,” said Bill Fahy, a Moody’s senior credit officer, in a press release.

“While many quick-service restaurants (QSR) are still able to provide service through the drive-thru and delivery, restaurant sales will still be well below normal operating levels for the typical QSR restaurants,” added Fahy.

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