S&P cuts Landry's

Standard & Poor's said it lowered the ratings, including the corporate credit rating, on Landry's Restaurants Inc. to B+ from BB-.

The ratings will remain on CreditWatch with negative implications, where they were placed on March 16, because the company has not filed its 10-K for fiscal 2006 or 10-Q for the first quarter of fiscal 2007, the agency said.

As a result, S&P said that the company is in technical violation with its lenders, who can force acceleration of redemption of principal and interest.

The CreditWatch will be resolved once Landry's is current with its filings and in good standing with its lenders, S&P noted.

However, the agency said it may lower the ratings on Landry's if lenders do accelerate, adding that it cut the rating on Landry's senior secured credit facility, consisting of its term loan and revolving credit facility, to BB- from BB while the recovery rating on the facility remains at 1.

S&P added that the $400 million 7.5% senior unsecured notes due Dec. 15, 2014, were also downgraded to B- from B.

The downgrade reflects management's more aggressive financial policy and willingness to fund acquisitions and capital expenditures with debt, the agency said.

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