Wendy's credit rating placed on review

by Eric Schroeder
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NEW YORK — Moody’s Investors Service on June 2 placed the credit ratings of Wendy’s International Holdings, L.L.C., on review for a possible downgrade.

Moody’s said its action followed an announcement by Wendy’s, the parent corporation for Wendy’s International Inc. and Arby’s Restaurant Group, that it is seeking an amendment to its bank agreement that would allow the company to sell senior unsecured debt securities.

Ultimately, the Moody’s review will center on the degree to which additional debt would diminish Wendy’s debt protection measures, but the agency initially will look at whether Wendy’s is successful in changing its lending agreement and whether the company is able to tap into debt markets.

Affected by the debt is Wendy’s corporate family rating of B1. For its Wendy’s International subsidiary, $525 million in senior unsecured notes rated at B2 will be reviewed as will the Ba2 ratings on credit at Arby’s.

The Moody’s announcement represented the first action taken by the agency toward Wendy’s since the corporate family rating was assigned in March. Also at that time, Moody’s assigned a probability of default rating of B1 to Wendy’s, with a negative outlook.

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