Moody's cuts CBRL, rates loans Ba2

Moody's Investors Service said it downgraded CBRL Group Inc.'s corporate family rating to Ba2 from Ba1 and senior unsecured notes to Ba3 from Ba1 and assigned a Ba2 rating to CBRL's proposed $1.25 billion senior secured bank facility consisting of a $250 million revolving credit facility, an $800 million term loan B and a $200 million delayed-draw term loan.

The outlook is stable, and this concludes the review for possible downgrade begun on March 20.

Moody's said the downgrade reflects a significant weakening of the company's credit metrics and a considerable shift in operating strategy resulting from the company's proposed $800 million debt-financed share repurchase initiative and planned monetization of Logan's Roadhouse Inc. Debt to EBITDA is 4.3x.

Supporting the ratings are Cracker Barrel Old Country Store's strong brand name recognition, CBRL's significant real estate ownership and Cracker Barrel's steady cash flow generation, the agency said.

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