Moody's drops Denny's

Moody's Investors Service said it downgraded Denny's Holdings Inc.'s corporate family rating and probability of default rating to B2 from B1.

Moody's said it also lowered the senior unsecured ratings of Denny's to Caa1 (LGD 5, 81%) from B3 (LGD 5, 84%).

In addition, the Ba2 senior secured ratings of Denny's Inc. and SGL-3 speculative-grade liquidity of Denny's were affirmed, the agency added.

The outlook is stable.

"Although Denny's has reduced funded debt levels over the past several years, weakening operating performance due to deterioration in consumer spending and intense competition has resulted in debt protection metrics that are more representative of the revised ratings," stated Bill Fahy, senior analyst.

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