Moody’s rates Raising Cane’s notes B3

Moody’s Investors Service said it assigned Raising Cane's Restaurants, LLC a B1 corporate family rating, a B1-PD probability of default rating and a B3 rating to its planned $500 million of 5.5-year senior unsecured notes. The outlook is stable.

“The B1 CFR assignment reflects Raising Cane's narrow product offering, a relatively small number of system-wide restaurants, some geographic concentration and moderately high leverage, somewhat offset by its solid performance, strong margins, and good brand awareness in its core markets,” the agency said in a press release.

Moody’s did not provide an explanation for the B3 rating on the notes in its release.

The company will use the proceeds to repay revolver borrowings. The company also plans to amend its credit agreement to extend the maturity to 2028 and upsize the unrated term loan A to $1 billion, with a total revolving credit facility size of $1 billion. Pro forma for the transaction, Moody's adjusted debt/EBITDA was 4.1x for the last 12 months ending June 27, 2023.

“The stable outlook reflects that despite potential pressures in the restaurant industry due to lower quick-service restaurant traffic trends, Raising Cane's will continue to generate solid operating performance and new restaurant openings will be at a measured pace,” Moody’s said.

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