Bloomberg News reports that Uno Restaurant Holdings -- which operates Pizzeria Uno -- is the latest in a string of restaurants that can't stay afloat as consumers reverse splurge on their recession diets. It follows Bennigan's and Steak & Ale among those national restaurant chains that couldn't feed banks' hunger for loan repayment.

Bloomberg reports that Uno won't pay the interest due on its debt as scheduled, and S&P downgraded it as a result. It wrote that Uno "will delay paying interest, making use of a 30-day grace period allowed in the terms of its $142 million of notes due 2011, according to a statement from Standard & Poor's. S&P cut Uno by two levels to CC and said it would downgrade again to its lowest rating of D if the West Roxbury, Massachusetts-based company fails to pay on Aug. 15."

In addition to Bennigan's, Bloomberg reported that a big Pizza Hut chain filed for bankruptcy this month -- "Ohio-based Midland Food Services LLC, the operator of 92 Pizza Hut restaurants." I am a big fan of Uno's pizza and its nachos, but I guess that Uno has borrowed more money than its declining sales and rising food and labor costs permit it to repay. It remains to be seen whether it can renegotiate terms with its creditors.

If not, it will probably join its brethren in taking the hit for a lousy economy that's likely to get worse.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.