Moody's cuts Restaurant Co. loan, notes, liquidity

Moody's Investors Service said it affirmed The Restaurant Co.'s corporate family rating at B2 and assigned a B2 rating to its proposed $100 million senior secured term loan B.

At the same time, Moody's said it said it downgraded the senior secured revolving line of credit to B2 from B1, downgraded the senior unsecured notes to B3 from B2 and downgraded the speculative-grade liquidity rating to SGL-3 from SGL-2.

The rating actions reflect the combination of proven, well-known family dining restaurant concepts that generate relatively stable revenues and margins, improved diversification and potential cost savings and synergies, the agency said.

Factors constricting the ratings include high financial leverage, operating in the mature, highly competitive family dining category, limited free cash flow available for debt reduction and a modest liquidity position, Moody's added.

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