S&P Keeys Darden Restaurants (DRI) on CreditWatch Developing

May 16, 2014 10:47 AM EDT

Standard & Poor's Ratings Services said its ratings on Darden Restaurants Inc. (NYSE: DRI), including the 'BBB-' corporate credit rating, remain on CreditWatch with developing implications, where we placed them on Dec. 19, 2013.

We placed ratings on CreditWatch following Darden's announcement in December 2013 that it plans to separate Red Lobster from the remaining group. Darden announced today the sale of Red Lobster to Golden Gate Capital for $2.1 billion, with proceeds to support about $1 billion debt reduction and share repurchases of up to $700 million.

We expect to resolve the CreditWatch placement close to the completion of the transaction, after evaluating the business and financial impact of the finalized transaction, the financing details, and management's financial policies and capital structure, including any resolutions with the activists.

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