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December 3, 2007 |
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BURGER KING: Moody's Affirms Ba2 Corporate Family Rating Moody's Investors Service has affirmed the Ba2 corporate family rating of Burger King Corporation. Moody's also affirmed the Ba2 rating assigned to the company's US$250 million senior secured term loan A, US$1.1 billion senior secured term loan B, and US$150 million senior secured revolving credit facility. In addition, Moody's changed the outlook for Burger King to stable from negative. The Ba2 corporate family rating reflects Burger King's strong brand recognition, the meaningful scale and geographic diversity of system-wide restaurants, as well as improved operating performance and good liquidity. However, the rating also incorporates the company's relatively weak credit metrics for the current rating category and somewhat aggressive growth plans that are driven largely by franchisees. The ratings also incorporate the intense competitive environment within the United States restaurant industry, increasing margin pressures related to historically high commodity costs and wages, and a more financially challenged consumer. The stable outlook reflects Moody's expectation that a continued improvement in operating performance, driven by positive traffic and average check, should further strengthen debt protection metrics and liquidity. The outlook also expects that management will exercise a prudent treasury policy with shareholder-based initiatives supported by excess free cash flow and not by non- operating cash flows, asset sale proceeds, or additional debt. Headquartered in Miami, Florida, The Burger King (NYSE: BKC) -- http://www.burgerking.com/ -- operates more than 11,000 restaurants in more than 69 countries and territories worldwide. Approximately 90% of Burger King restaurants are owned and operated by independent franchisees, many of them family owned operations that have been in business for decades. Burger King Holdings Inc., the parent company, is private and independently owned by an equity sponsor group comprised of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners. Burger King Corp. operates restaurants in the Latin American, Caribbean and Mexican Region. The company's first international restaurant opened in 1963 in Puerto Rico. Since 1994, Burger King has opened more than 300 restaurants in the Latin American region, producing some of the strongest comparable store sales growth for the brand around the world. Burger King(R) restaurants in Latin America serve approximately 1,600 customers per day each, making them some of the highest volume restaurants in the system. |
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