Oct. 30, 2009 (Business Wire) -- Fitch Ratings has affirmed Burger King Corporation's (Burger King) (NYSE:BKC) ratings as follows:

--Long-term Issuer Default Rating (IDR) at 'BB';

--Secured bank credit facility at 'BB+'.

The Rating Outlook has been revised to Stable from Positive. At Sept. 30, 2009, Burger King had approximately $890 million of debt, most of which is secured.

Burger King's ratings reflect its positive free cash flow (FCF) generation, competitive position in the quick service restaurant (QSR) sector and improving system-wide operating infrastructure. The company is making noticeable progress with guest satisfaction and is implementing longer competitive hours of operation. The on-going rollout of its flexible batch broiler will foster the continued launch of additional products in order to help drive traffic. Burger King is also reinvesting in company-operated restaurants by remodeling units. The company has generated annual average FCF (defined as cash flow from operations less capital expenditures and dividends) of approximately $50 million since its reimaging program began in 2008.

The Outlook revision to Stable is due to the fact that operating trends have been weaker than Fitch had anticipated. Burger King's same-store sales (SSS) growth decelerated and margins contracted more than expected throughout fiscal 2009. SSS performance also lagged national peers in the first quarter of fiscal 2010 ended Sept. 30, 2009. During this period, world-wide SSS declined 2.9%, compared to a 3.6% increase during the first quarter ended Sept. 30, 2008.

Fitch believes Burger King will continue to benefit from its barbell menu strategy of indulgent and value offerings; such as its premium Steakhouse burgers and its $1 1/4 Pound Double Cheeseburger. However, SSS comparisons could remain negative in the near term, given higher rates of unemployment among the company's core customer demographics.

Fitch anticipates that weak top line growth will result in modest additional deterioration in leverage ratios over the near term. Fitch does not expect a slight weakening in Burger King's credit statistics to have further negative rating implications, given that there is room in the current ratings.

For the latest 12 month period ended Sept. 30, 2009, Burger King's adjusted leverage (defined as total debt plus eight times gross rent expense divided by operating earnings before interest, taxes, depreciation, amortization, and gross rent expense or EBITDAR) was approximately 3.7 times (x), versus 3.6x for the fiscal year ended June 30, 2009. During fiscal 2010, Burger King plans to repay $62.5 million of scheduled debt amortization and expects flat year-over-year U.S. commodity costs.

At Sept.