Moody's upgrades Arcos Dorados

Moody's Investors Service said it upgraded the corporate family rating and senior unsecured ratings of Arcos Dorados Holdings Inc. to Ba2 from Ba3.

The outlook also was revised to stable from positive.

The company's $348 million outstanding senior unsecured notes due 2023 were upgraded to Ba2 from Ba3 and its $265 million senior unsecured notes due 2027 were upgraded to Ba2 from Ba3.

The upgrades reflect the company's improvement in operating performance with revenue growth in all regions, Moody's said, along with margin improvement and continued investments in expansion, modernization and innovation.

The company's adjusted EBITDA and operating margins are at the highest level since 2013, the agency noted.

The ratings continue to incorporate the company's solid market position in Latin America as McDonald's master franchisee and its size and scale as the largest independent McDonald's franchisee worldwide, Moody's said.

The ratings are tempered by the company's currency exposure and its concentration of cash flows in a limited number of markets with high dependency on the Brazilian and Argentine markets, the agency said.

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