Friendly Ice Cream credit rating downgraded by Moody's

by Josh Sosland
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NEW YORK — The corporate family credit rating of Friendly Ice Cream Corp. has been cut to B3 from B2 by Moody’s Investors Service. The Wilbraham, Mass., ice cream maker’s $175 million of senior unsecured notes were downgraded to B3 from B2.

The rating outlook for Friendly remains stable. The company has a $35 million senior secured revolving credit facility that Moody’s does not rate.

Accounting for the downgrades were Friendly’s continued weak operating performance, high financial leverage combined with limited free cash flow to reduce debt, the company’s dependence on the Northeast and the company’s participation in the mature, highly competitive family dining category.

The B2 rating of Moody’s had been granted in a February 2004 upgrade.

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