S&P ups Sagittarius

Standard & Poor's said it raised its corporate credit rating Sagittarius Restaurants LLC to B from selective default (SD). The rating on the company's senior secured credit facility, consisting of a $160 million term loan and $39 million revolving credit facility remains at B with a 3 recovery rating, which indicates an expectation of 50% to 70% recovery in the event of default, the agency said.

The upgrade reflects the company's restructuring, which includes a reduction by subordinated bond holders of their claim, divestiture of the Captain D's business, leaving Del Taco as the company's only restaurant concept, and the additional equity investment, S&P said.

The ratings also consider the company's participation in the highly competitive quick service restaurant industry, its geographic concentration on the West Coast and still highly leveraged capital structure, the agency said.

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