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Moody's: OSI view negative
Moody's Investors Service said it affirmed OSI Restaurant Partners, Inc.'s B2 corporate family and probability-of-default ratings and lowered the speculative grade liquidity rating to SGL-3 from SGL-2.
Also affirmed were the B1 loan ratings (LGD3, 33%) and the Caa1 rating (LGD5, 85%) for the senior unsecured notes.
The outlook was revised to negative from stable.
The negative outlook reflects OSI's weaker-than-anticipated operating performance and debt protection metrics that are weak for the current rating, according to the agency.
"The combination of a financially challenged consumer, higher operating costs and competitive pressures will make it difficult for OSI to maintain margins, earnings and cash flow without negatively impacting traffic patterns over the intermediate term," Moody's senior analyst Bill Fahy said in a written statement.
Ratings also consider the company's scale, Outback Steakhouse brand, geographic diversity and adequate liquidity, Moody's said.
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