Moody’s might cut Burger King

Moody's Investors Service said it placed the ratings of Burger King Capital Holdings, LLC and Burger King Corp. (BKC) on review for downgrade, including Burger King Capital’s B2 corporate family rating, B2-PD probability of default rating and Caa1 unsecured note rating, as well as BKC's Ba3 senior secured rating and B3 unsecured rating.

Moody’s said the review was prompted by the Aug. 27 announcement that Burger King Worldwide Inc., the publicly traded parent company of Burger King Capital and BKC, entered into a definitive agreement to acquire Tim Hortons, Inc. for roughly $12 billion. The proposed financing for the transaction is expected to include about $9.5 billion of debt, $3 billion of 9% preferred stock and about $2.9 billion of new common equity. The transaction is expected to close in late 2014 or early 2015.

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