S&P upgrades O'Charley's notes

Standard & Poor's said it raised the rating on O'Charley's Inc.'s subordinated notes to B from B- and revised its recovery rating on the notes to 5 from 6, indicating a 10% to 30% recovery of principal in the event of default. The agency also affirmed its corporate credit rating at B+ and senior secured notes at BB with a recovery rating of 1, indicating 90% to 100% recovery in the event of default.

This action comes after the company reduced the size of its senior secured revolving credit facility to $45 million from $83 million.

The rating reflects the company's participation in the competitive casual dining restaurant industry, which has been vulnerable to declines in consumer spending, S&P said.

It also considers the company's aggressively leveraged capital structure, the agency said.

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