Moody's upgrades Portillo's

Moody's Investors Service said it raised Portillo's Holdings, LLC’s ratings, including its corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, senior secured first-lien bank credit facility to B2 from B3 and senior secured second-lien term loan rating to Caa2 from Caa3. The agency revised the outlook to stable from negative.

"The upgrade reflects Portillo's ability to generate strong off-premise results in 2020 to help offset the impact from restaurant closures due to the spread of Covid-19," stated Pete Trombetta, a Moody's vice president and senior analyst, in a press release.

"With restrictions on indoor dining in Portillo's markets, the company was able to increase its mix of drive-thru, curbside pickup, and delivery and only experienced revenue declines of mid-single digits as compared to 2019," he added.

The outlook reflects Portillo's good liquidity profile, with gradual improvement in debt leverage and interest coverage metrics over the next 12-18 months, the agency said.

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