S&P lowers Penn National

Standard & Poor's said it revised the recovery rating on Penn National Gaming Inc.'s 8¾% senior subordinated notes due 2019 to 5, which reflects 10% to 30% expected default recovery, from 4, indicating 30% to 50% expected recovery.

The agency also said it consequently lowered the rating on the notes to BB- from BB.

The rating also was removed from CreditWatch, where it was placed with negative implications in October, S&P said.

The revisions reflect the closing on a $1 billion add-on to the existing senior secured credit facilities. The add-on results in a higher level of secured debt outstanding under the simulated default scenario versus previous analysis, the agency said.

This reduces the recovery prospects for the subordinated notes enough to warrant a downward revision, S&P said.

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