Friendly Ice Cream Corp.’s distressed junk bonds have recovered since a recent downgrade by Standard & Poor’s. But the casual restaurant chain could face bankruptcy by year end if it does not refinance its bank debt, said a high yield analyst. “If it’s going to happen, it [will be] before the end of the year,” said the analyst who wished not to be named. Friendly’s $200 million in 10.5% notes are now stable at 50. They dropped into the low 40s after S&P downgraded the senior unsecured debt from B to CCC+ on April 20. The rating indicates a poor outlook and potential default.
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