Moody’s rates Restaurant Technologies loans B1, Caa1

Moody's Investors Service said it assigned ratings for Restaurant Technologies, Inc., including a B2 corporate family rating and a B2-PD probability of default rating.

The agency also assigned a B1 rating to each of the company's proposed first-lien credit facilities, including a $60 million five-year revolver and a $375 million seven-year first-lien term loan.

In addition, Moody's assigned a Caa1 rating to the company's proposed $125 million eight-year second-lien term loan.

The outlook is stable.

“The B2 corporate family rating largely reflects Restaurant Technologies' relatively small size, high financial leverage in connection with the LBO of the company, and our expectation for limited free cash flow generation over the next 12-18 months owing largely to the company's high interest expense burden and substantial upfront capital expenditures related to new customer installations,” Brian Silver, Moody's vice president and lead analyst for the company, said in a news release.

“However, we recognize the company's well-entrenched position in its customers' respective cooking oil supply chains, the recurring nature of its revenue stream, and the safety, quality and efficiency benefits that the company's products and services provide to its customers.”

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