Moody's rates Rare Restaurant note Caa1

Moody's Investors Service said it assigned a Caa1 corporate family rating to Rare Restaurant Group, LLC and a Caa1 (LGD3, 46%) rating to its $100 million guaranteed senior secured notes due 2014.

The outlook is stable.

Rare will use the note proceeds, along with $70 million in contributed equity and a $20 million holding company note, to acquire all the assets of Mastro's restaurants and related assets.

The agency said the Caa1 corporate family rating reflects the company's modest scale, limited scope, weak debt protection metrics, high geographic concentration risk and relatively aggressive growth plans.

The rating also incorporates the company's reasonable operating metrics, good margins and sizeable average unit volumes, Moody's said, and the stable outlook reflects the agency's expectation that Rare will prudently manage its growth strategy in an effort to improve debt protection metrics, minimize any potential brand dilution or deterioration in liquidity.

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