S&P cuts Denny's note to B-

Standard & Poor's said it lowered Denny's Holdings Inc.'s. $175 million senior unsecured notes to B- from B and revised the recovery rating to 6 from 5.

The action reflects lower enterprise valuation due to weaker prospects for the casual-dining segment of the restaurant industry. As a result, the valuation multiple was revised to 4x from 5x.

The agency affirmed the B+ corporate credit rating on Denny's Corp. and the BB bank loan rating on its $350 million bank facility. The 1 recovery rating remains unchanged.

The outlook is stable.

Ratings reflect the company's inconsistent operating performance, the risks of operating in the intensely competitive family-dining restaurant industry, high leverage and thin cash flow protection measures, the agency said.

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