Moody’s gives IRB facilities B1, notes Caa1

Moody's Investors Service said it assigned a B1 rating to IRB Holding Corp.'s proposed $150 million senior secured revolving credit facility and $1.575 billion senior secured term loan and a Caa1 rating to the company's proposed $485 million senior unsecured notes.

In addition, the agency assigned IRB a B2 corporate family rating and B2-PD probability of default rating.

The outlook is stable.

Proceeds from the proposed senior secured bank facilities, along with the $485 million of senior unsecured notes, $23 million from Arby's VFN securitization revolver and approximately $890 million of common equity contributed by affiliates of Roark Capital Group will be used to fund the acquisition of and repay outstanding debt of Buffalo Wild Wings (BWW).

"The ratings reflect IRB's high leverage and modest coverage pro forma for the acquisition of BWW with leverage of about 6.5 times and coverage of around 1.2 times for the LTM period ending October 1, 2017 and more challenged operating metrics of late," Moody's senior credit officer Bill Fahy said in a news release.

"However, the ratings also reflect IRB's material scale, multiple brands and very good liquidity."

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