Moody's may up Sagittarius Restaurant

Moody's Investors Service said it revised Sagittarius Restaurant LLC's probability of default rating to Caa2/limited default from Caa2. The agency also said it placed its Caa2 corporate family rating and outlook under review for possible upgrade based on the expected improvement in the capital structure and business profile post restructuring.

The B2 (LGD2, 21%) rating on the $60 million senior secured revolving credit facility due 2012 is not affected by this action, and neither is the B2-rated $265 million senior secured term loan credit facility due 2013.

The company is currently working on a recapitalization of its balance sheet, which will involve several transactions that are expected to be completed concurrently, Moody's said.

The upgrade review reflects the potential positive impact from the proposed recapitalization, the agency said.

Concerns include the level of its unmanageable debt loan relative to its cash flow generation, Moody's said, and weak liquidity profile.

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