PR’s CRI See Breaching Covenants

S&P has cut Puerto Rico-based Caribbean Restaurants (CRI) to CCC+ from B. The outlook remains negative. “The downgrade reflects the distinct possibility that the company will breach financial covenants of its bank facility at its fiscal year-end,” says S&P credit analyst Jackie Oberoi. The fiscal year ends April 30 and the covenants become increasingly restrictive at the end of July. “The downgrade also reflects the company’s continued weak performance, which has been driven by a soft Puerto Rican economy coupled with increased labor, utility, and commodity costs,” adds Oberoi.