Moody’s: Burger King/Tim Hortons loans B1, notes Caa1

Moody's Investors Service said it assigned a provisional B1 rating to 1011778 B.C. Unlimited Liability Co.’s proposed $500 million guaranteed senior secured first-lien revolving credit facility and $6.75 billion guaranteed senior secured first-lien term loan and a provisional Caa1 rating to the company's proposed $2.25 billion guaranteed senior secured second-lien notes.

In addition, the agency assigned 1011778 B.C. a B2 corporate family rating, B2-PD probability of default rating and SGL-1 speculative grade liquidity rating.

The outlook is stable.

The ratings of Burger King Capital Holdings, LLC and Burger King Corp. remain under review for downgrade given the uncertainty as to the ratings of any debt of Burger King Capital and Burger King not tendered and that remains part of the final capital structure.

These ratings were placed under review on Aug. 27 following the announcement that Burger King Worldwide Inc., the publicly traded parent company of Burger King Capital and Burger King, entered into a definitive agreement to acquire Tim Hortons, Inc. for about $12 billion. The transaction is expected to close in late 2014 or early 2015, subject to Tim Horton's shareholder approval and various regulatory reviews in the U.S. and Canada.

Proceeds from the proposed facilities and notes, along with roughly $3 billion of 9% cumulative perpetual series A preferred stock and $3.4 billion of new common equity and cash on hand, will be used to fund the acquisition of Tim Hortons and refinance the outstanding debt at Burger King.

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