S&P rates Ruby Tuesday notes B-

Standard & Poor's said it assigned its preliminary B corporate credit rating to Ruby Tuesday Inc.

The outlook is stable.

At the same time, the agency said it assigned a preliminary B- issue-level rating with a preliminary 5 recovery rating to the company's proposed $250 million senior unsecured notes. The recovery rating indicates an expectation for modest recovery of principal in the event of a payment default.

"The rating on casual-dining restaurant chain Ruby Tuesday reflects our expectation that credit metrics will continue to weaken in the near term," said S&P credit analyst Diya Iyer in a news release.

While the transaction adds only modest leverage, S&P expects operating performance to decline in the coming year, the agency said.

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