S&P lowers OSI

Standard & Poor's said it lowered its corporate credit rating on OSI Restaurant Partners Inc. to B from B+.

The company's bank loan ratings, including the ratings on its $150 million revolving credit facility due 2013, $1.31 billion term loan B due 2014 and $100 million prefunded revolving credit facility due 2013, have been lowered to BB- from BB, the agency added.

At the same time, the rating on OSI's $550 million 9.625% notes due 2015 has been lowered to CCC+ from B-, S&P said.

The outlook is stable.

The agency said that the downgrade follows OSI's announcement that the company will fund the $80 million increase in its purchase price with debt rather than an equity contribution.

"A positive outlook would be considered," said S&P credit analyst Jackie E. Oberoi, "were OSI to reduce leverage through measures that include increased profits as a result of improvement in same-store sales for OSI's core Outback Steakhouse concept and continued success with recent expense-reduction measures."

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