Moody's rates Buffalo Thunder note B2

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to the Buffalo Thunder Development Authority and a B2 rating with a loss-given-default assessment of LGD4 to its $245 million senior notes.

The outlook is stable.

Proceeds from the new note offering, along with a new FF&E facility, will be used to finance the development and construction of the Buffalo Thunder Resort and Casino, which will include a hotel that will be branded as the Hilton Santa Fe North and managed by Hilton Hotels Corp.

The agency said the ratings consider Buffalo Thunder's relatively small cash flow base, dependence on a single gaming market and the development and ramp-up risks inherent in the expansion project.

Positive ratings consideration is given to the strength of the Santa Fe market, which has had Class III gaming since 1994; stable revenues and EBITDA generated from Buffalo Thunder's existing Cities of Gold Casino, which will continue to operate beyond the opening of the Buffalo Thunder Resort; strong brand identity with the Hilton name; and the authority's interest reserve account.

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