Moody's changes Checkers outlook to stable

Moody's Investors Service said it affirmed Checkers Drive-In Restaurants, Inc.'s corporate family rating at B3, probability of default rating at B3-PD and $160 million 11% senior secured notes at B3 (LGD4) and changed the outlook to stable from negative.

The agency said the change in outlook reflects Checker's relatively steady improvement in operating performance and earnings, driven in large part by positive same-store sales trends that along with modestly lower funded debt levels has resulted in better credit metrics. The outlook also anticipates that management will maintain adequate liquidity and a moderate financial policy.

The B3 corporate family rating reflects Checkers’ high leverage and modest coverage and Moody’s concern that the soft consumer spending environment and competition will continue to pressure same-store sales, earnings and debt protection metrics.

The ratings are supported by the company's material level of brand awareness, reasonable scale and adequate liquidity, Moody’s said.

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