Moody's rates GPS notes Caa1

Moody's Investors Service said it gave GPS Hospitality Holding Co. LLC’s planned $385 million of seven-year senior secured notes a Caa1 rating and changed the outlook to positive from stable.

The agency also affirmed the Caa1 corporate family rating, Caa1-PD probability of default rating and Caa1 senior secured bank ratings. The senior secured bank facility ratings will be withdrawn upon the close of the proposed refinancing.

GPS plans to use the proceeds to refinance the company's senior secured term loan, repurchase about $105 million of preferred equity as well as general corporate purposes. GPS will also be entering into a new five-year unrated $50 million super-priority revolving credit facility that is expected to be undrawn at close.

Moody’s noted the outlook change reflects the view for a continued improvement in same-store sales which will help drive higher earnings and lead to lower leverage and improved.

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