Moody's rates California Pizza loans B2

Moody's Investors Service said it assigned a B2 rating to California Pizza Kitchen, Inc.'s proposed amended $370 million first-lien senior secured term loan B and $30 million first-lien revolver.

In addition, Moody's affirmed the B3 corporate family rating. The company's probability of default rating was lowered to Caa1-PD from B3-PD.

The outlook is stable.

California Pizza is currently in the process of amending its bank facility to increase the size of the term loan B to $370 million from $257 million.

Proceeds from the increase in the term loan B and cash on hand will be used to repay the company's existing $75 million 12% second-lien term loan due 2018, fund a $50 million special dividend to shareholders and pay fees and expenses.

The amendment will also eliminate the facilities' fixed charge coverage covenant, leaving adjusted leverage as its only financial maintenance covenant, Moody's said.

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