Moody's Rates Columbia Lake Acquisition

NEW YORK (AP) — Moody's Investors Service said Tuesday that the company acquiring CKE Restaurants has weak debt protection metrics and expects its operating performance will suffer given high unemployment and tough competition.

As a result, Moody's assigned Columbia Lake Acquisition Corp. a "B2" corporate family rating and probability of default rating and affirmed its "SGL-2" speculative grade liquidity rating.

The rating agency also assigned a "Ba2" rating to its $100 million first-lien revolving credit facility and a "B2" to the company's $600 million guaranteed senior secured second-lien notes.

The outlook is stable, given Moody's view that Columbia's debt protection metrics should remain near current ranges despite persistently soft consumer spending trends as the company has made major cost reductions. The outlook also reflects Moody's expectation that the company will maintain good liquidity.

Columbia is in the process of acquiring CKE Restaurants, Inc., which operates the Carl's Jr. and Hardee's chains.

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