In line with sector peers, fast casual restaurant franchisor and operator Quidditch Acquisition Inc. (Qdoba) is experiencing a significant shock to its operations due to the coronavirus pandemic. We are lowering our issuer credit rating on Qdoba to 'CCC+' from 'B-'. The outlook is negative. At the same time, we are lowering our issue-level rating on its senior secured credit facilities to 'CCC+'. The recovery rating remains '3'. The negative outlook reflects uncertainty regarding the duration and extent of the coronavirus disruption and ensuing recessionary environment, which could lead to liquidity shortfalls over the coming year. The downgrade reflects our view that Qdoba's capital structure is potentially unsustainable this fiscal year as cash flow and profitability prospects have weakened significantly,
