U.S.-based restaurant operator Darden Restaurants Inc. has adopted the Financial Accounting Standards Board's revised lease accounting standard. Pro forma for this change, we expect the company's adjusted leverage to increase to the low-3x area in fiscal year 2020, up from 1.8x as of May 26, 2019. However, the company's underlying creditworthiness remains unchanged. We have revised our downgrade leverage threshold to about 4x and our upgrade leverage threshold to the mid-2x area for the current rating. We are affirming our 'BBB' long-term issuer credit rating on Darden. The stable outlook reflects our expectation that steady performance gains and a consistent financial policy will lead the company to maintain adjusted leverage of about 3x with annual free operating cash flow (FOCF)
