Moody's cuts Seneca Gaming

Moody's Investors Service said it lowered Seneca Gaming Corp.'s corporate family and probability of default ratings to B1 from Ba2, along with its $500 million senior unsecured notes due 2012 to B1 (LGD 4, 52%) from Ba2 (LGD 4, 51%). The agency also maintained its review for possible downgrade.

Its short-term liquidity profile is expected to remain adequate as expressed by the existing SGL-3, the agency said.

The downgrades follow news that the Seneca Nation of Indians, owner of company, has withheld exclusivity payments to the state of New York, Moody's said.

The downgrades also reflect a view that because the exclusivity payments withheld are not currently in a restricted account or being held by an independent third party set-up solely for the purpose of funding any potential compact settlement, there is no formal assurance that the nation will have or make these funds available, the agency said.

In the extreme event that a settlement is not reached and the compact is terminated, the company's ability to operate a class III gaming facility would be in jeopardy, Moody's added.

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