TEXT-S&P assigns Darden Restaurants notes 'BBB'

Mon Oct 1, 2012 10:44am EDT

Oct 1 () - Standard & Poor's Ratings Services said today that it assigned
its 'BBB' rating (the same as the long-term corporate credit rating) to
Orlando-based Darden Restaurants Inc.'s proposed $300 million senior
unsecured notes due 2022. The company plans to use net proceeds from the note
issuances for general corporate purposes, including repaying its 5.625% senior
notes due October 2012 and repaying short-term debt. 

The ratings on Darden reflect Standard & Poor's view of its business risk 
profile as "satisfactory," based on its outperformance relative to industry 
peers and its market share leader position in a very fragmented industry. 
Accordingly, we expect Darden will continue to grow revenue and profits over 
the near term from new unit growth. Despite the expected increase in debt from 
its recent Yard House acquisition, we maintain our view of the company's 
financial risk profile as "intermediate." This is based on our projection that 
credit ratios will improve over the next two years, and that Darden's 
financial policies will remain moderate. 

The outlook on Darden is stable, which incorporates our expectation of 
considerable profit growth leading to credit ratio enhancement over the next 
two years. However, if profits do not grow as anticipated and credit ratios 
are static over the near term, we may consider a lower rating. For example, if 
at the end of fiscal 2013, operating lease-adjusted leverage is still 2.8x or 
worse, we may consider a lower rating or an outlook change. A positive rating 
action is not a likely near-term consideration, given the debt Darden has 
taken on to fund the acquisition. 

RELATED CRITERIA AND RESEARCH
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

RATINGS LIST

Darden Restaurants Inc.
 Corporate Credit Rating                    BBB/Stable/A-2

New Ratings

Darden Restaurants Inc.
 Senior Unsecured
  $300 mil. nts due 2022                    BBB


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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