Moody's affirms Dunkin'

Moody's Investors Service said it affirmed Dunkin' Brands, Inc.'s B3 corporate family and probability of default rating and Caa2 senior unsecured note rating.

Moody's also said it lowered the company's senior secured bank ratings to B2 from B1.

The outlook is stable.

Dunkin' Brands is in the process of re-pricing its secured bank credit facility and increasing the size of the term loan to $1.4 billion from $1.25 billion, Moody's said.

The proceeds will be used to buy back about $150 million of the company's $625 million senior unsecured notes, the agency said.

The downgrade reflects the proposed increase in the amount of senior secured bank debt in Dunkin' Brands capital structure, Moody's said, as well as the material reduction in liabilities that are junior to the secured facilities.

The affirmation considers Dunkin' Brands' high leverage and an expectation that historically high unemployment and intense promotional activity by its competitors will continue to pressure operating performance, the agency said.

The ratings also consider the company's regional geographic concentration in the United States and relatively narrow product focus, Moody's said.

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