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Moody's rates Romacorp notes
Moody's Investors Service said it assigned a rating of Caa2 to the $49.6 million senior unsecured notes (2008) of Romacorp Inc. that were issued in exchange for the $55.0 million senior unsecured note (2006) issue following the company's failure to make the July 1, 2003 interest payment.
Moody's also upgraded the senior implied rating to Caa2 from Ca and maintained the negative outlook.
Moody's said the low rating levels continue to reflect the company's poor debt protection measures, mediocre operating performance, and likely poor recovery in the event of a default. The rating upgrade was prompted by the lower cash interest burden of the 2008 notes relative to the 2006 notes so Moody's believes that Romacorp may now generate enough liquidity over the next 12 months to meet its minimal obligations.
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