S&P downgrades Uno Restaurant

Standard & Poor's said it lowered Uno Restaurant Holdings Corp.'s corporate credit rating to CCC+ from B- and senior unsecured debt to CCC from CCC+.

The outlook remains negative.

The rating action is based on the company's limited liquidity and S&P's concern that Uno may not meet its bank covenants when they step up in 2007, especially since the company's weak operating performance is not expected to recover in the near term. Uno has amended its senior secured credit facility four times in the current fiscal year.

The agency said the ratings on Uno reflect the company's relatively small cash flow base, limited financial flexibility, highly leveraged capital structure, regional concentration in the northeastern United States and participation in the highly competitive casual dining restaurant industry. For the 12 months ended July 2, debt to EBITDA is very high at almost 10x.

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