S&P cuts Carrols to negative

Standard & Poor's said that it revised the outlook on Carrols Corp. to negative from stable and affirmed the B corporate credit rating.

The outlook revision reflects the expectation that Carrols' operating performance will remain relatively weak and its planned spin-off of the higher margin Hispanic brands will likely weaken its earnings and cash flow diversity, S&P said.

The ratings also consider the intense competition in the quick-service sector of the restaurant industry and the expectation that the company's heavy debt burden will continue to restrict cash flow protection, the agency said.

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