We are affirming our 'B-' issuer credit rating on Quidditch Acquisition Inc. based on our view of Qdoba Restaurant Corp.'s relatively small operating scale and execution risks associated with the company's growth strategy. We are also affirming our 'B-' issue-level and '3' recovery ratings on the company's $204 million first-lien term loan. The stable outlook reflects our expectation of EBITDA margin improvement of about 300 basis points over the next 12 months, with about flat free operating cash flow generation and adequate liquidity. Top-line improvements have also resulted in part from the company's focus on offering convenient off-premise dining options. Its third-party delivery and catering businesses continue to grow, and we believe Qdoba is well-positioned to take advantage of consumers'
