Rating Action: Moody's changes Sizzling Platter's outlook to stable; affirms B3 CFRGlobal Credit Research - 29 Aug 2022New York, August 29, 2022 -- Moody's Investors Service ("Moody's") today changed Sizzling Platter, LLC's ("Sizzling Platter") outlook to stable from negative. At the same time, Moody's affirmed all of Sizzling Platter's ratings, including its B3 corporate family rating (CFR), B3 senior secured rating and B3-PD probability of default rating (PDR)."The outlook change to stable reflects stabilized operating trends that have driven improved credit metrics with debt to EBITDA expected to approach 6.0x over the next 12 months", stated Moody's analyst, Matt Furbish. "Despite a challenging environment due to commodity inflation and labor shortages, as well as the impact of inflation on the consumer, Sizzling Platter's margins have remained resilient due to the company's ability to increase pricing and drive positive same store sales. These trends reflect the brand recognition and value perception of the Little Caesars' franchise, which accounts for the majority of Sizzling Platter's stores. The stable outlook is also supported by the company's good liquidity, as well as modest free cash flow after planned growth capital expenditures." stated Furbish.Affirmations:..Issuer: Sizzling Platter, LLC.... Corporate Family Rating, Affirmed B3.... Probability of Default Rating, Affirmed B3-PD.... Senior Secured Regular Bond/Debenture, Affirmed B3 to (LGD3) from (LGD4)Outlook Actions:..Issuer: Sizzling Platter, LLC.... Outlook, Changed To Stable From NegativeRATINGS RATIONALEThe B3 CFR reflects Sizzling Platter's high leverage and weak interest coverage, particularly given its modest scale as measured by revenue and number of restaurants, some geographic concentration and narrow product offering primarily focused on Little Caesars' pizza franchises in Florida, the Southwest US and Mexico. On an LTM basis as of April 17, 2022, debt to EBITDA was 6.9x and is forecast to approach 6.0x by year-end 2022. The rating is also constrained by weak interest coverage with EBITA to interest of 0.7x for the same period. However, the ratings are supported by Sizzling Platter's improving earnings and same-store trends, the high level of brand awareness at the Little Caesars' franchise, as well as its growth and diversification into other franchise brands that provide value-oriented offerings. The ratings are also supported by good liquidity which includes ample availability on the revolver and some cash on hand, however, modest free cash flow is expected after capital expenditures earmarked for new restaurant development.Sizzling Platter's private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies given the potential for higher leverage, distributions to the sponsor, or more aggressive growth strategies.The stable outlook reflects our view that credit metrics will continue to improve to below current levels with stronger earnings as revenue from new units and prudent expense management take hold. The outlook also incorporates our expectation that liquidity will remain good and cash flow will be used to support new unit growth.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSAn upgrade would require debt to EBITDA to below 5.5 times and EBITA coverage of gross interest of around 1.5 times, both on a sustained basis. An upgrade would also require the maintenance of good liquidity and positive free cash flow.A downgrade could occur if same store sales turned negative resulting in an inability to sustain credit metrics below the current levels. Quantitatively, a downgrade could occur if debt to EBITDA were sustained above 6.5x or EBITA to interest did not approach 1.0x on a sustained basis. A deterioration in liquidity for any reason could also result in a downgrade.Sizzling Platter, with headquarters in Murray, Utah, owns and operates 446 Little Caesars, 94 Jambas, 81 Wingstop, 20 Dunkin', 9 Sizzlers Steak House, 6 Red Robin, 2 Cinnabon, and 1 Jersey Mike's franchised restaurants as of April 17, 2022. Revenues for the LTM period ended April 2022 were $679 million. Sizzling Platter is owned by CapitalSpring.The principal methodology used in these ratings was Restaurants published in August 2021 and available at https://ratings.moodys.com/api/rmc-documents/74304. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. 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For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. Matt Furbish Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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