The condition of Captain D's bank loan is concerning rating agencies as a $135 million Bank of America led facility has not yet been refinanced and arrangements have not been made to extend the maturity of the credit, despite the fact the loan matures at the end of this month. Moody's Investors Service has put the senior unsecured bank loan rating on review for downgrade and Standard & Poor's has downgraded the corporate credit ratings on the expectation the loan should have been refinanced by now. S&P has the corporate credit rating hovering at CCC. Moody's has the loan at B2, recognizing the secured bank debt would achieve substantial recovery. Captain D's is a Nashville, Tenn.-based seafood restaurant chain.
The credit worthiness of the parent Shoney's is an issue, said Jerry Hirshberg analyst at S&P. Credit protection measures are very weak, he said, though he could not comment on why the company has not taken steps to refinance the loan. The rating action, moving to CCC from B+, is based on heightened concerns regarding the company's ability to refinance with lenders. Mike Payne, cfo, and Steve Parrett, spokesman for the seafood franchise, did not return repeated calls. Bank of America officials did not return calls by press time. Georgie Shields, a B of A spokeswoman, declined comment.