Moody's Upgrades El Pollo Loco (LOCO) CFR to B2 Amid IPO

Moody's Investors Service upgraded El Pollo Loco, Inc.'s (NASDAQ: LOCO) Corporate Family Rating to B2 from B3 following the company's successful IPO. At the same time, Moody's affirmed the company's B3-PD Probability of Default Rating and the B1 rating on its $205 million senior secured first lien bank facility. The Caa2 rating on EPL's second lien term loan will be withdrawn once it is repaid. Moody's also assigned a Speculative Grade Liquidity rating of SGL-2. The rating outlook is stable.

The upgrade of EPL's Corporate Family Rating ("CFR") to B2 reflects the company's successful $100 million IPO (net proceeds), the proceeds of which will be used to repay in full the company's $100 million second lien term loan due 2019. "EPL's credit metrics will improve significantly after the company repays 35% of reported debt", said Peter Trombetta, an Analyst at Moody's. "Pro forma for the IPO, EPL's lease-adjusted leverage will improve to 4.6 times from about 6.0 times and its interest coverage will improve to 3.2 times from 1.3 times", added Trombetta.

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