Moody's rates CKE loan Ba2, notes B2

Moody's Investors Service said it assigned B2 corporate family and probability of default ratings to Columbia Lake Acquisition Corp., a Ba2 (LGD1, 4%) rating to its $100 million guaranteed first-lien senior secured revolving credit facility due 2015 and a B2 (LGD3, 49%) rating to its $600 million guaranteed second-lien senior secured notes due 2018 and affirmed its SGL-2 speculative grade liquidity rating.

The agency will also change the name of Columbia to CKE Restaurants, Inc. to reflect the closure of Columbia's acquisition of the company.

The outlook is stable.

Proceeds from the $600 million note offering along with approximately $460 million in common equity contributed by Apollo Management were used to fund the acquisition. Columbia is being merged with and into CKE, with CKE as the surviving entity.

The agency said the B2 corporate family rating reflects the company's weak debt protection metrics and Moody's expectation that the company's operating performance will continue to be negatively impacted by historically high unemployment and intense competition.

The ratings also reflect the company's reasonable scale; multiple concepts, which add diversity; diversified day part, which boosts returns on invested capital; and good liquidity, Moody's said.

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