S&P affirms O'Charley's

Standard & Poor's said it affirmed its BB- corporate credit rating on O'Charley's Inc.

The outlook is stable.

At the same time, the agency said it assigned a BB rating to O'Charley's $125 million revolving credit facility due 2011 with a recovery rating of 1.

Proceeds from the loan will be used primarily to refinance the existing revolver and for working capital, capital expenditures and general corporate purposes, the agency said.

The ratings on O'Charley's reflect the company's relatively small market position in the highly competitive casual dining sector of the restaurant industry, weak operating trends and a highly leveraged capital structure, S&P said, adding that these factors are partly offset by favorable growth prospects for casual dining.

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