S&P rates Pinnacle notes B

Standard & Poor's said it revised the outlook on Pinnacle Entertainment Inc. to stable from negative, and affirmed its B+ corporate credit rating. The agency also said it assigned a B rating with a recovery rating of 5, which indicates a 10% to 30% recovery expectation in an default, to its proposed $250 million senior subordinated notes due 2020.

The company said it will use proceeds to refinance existing 8¼% senior subordinated notes due 2012 and to pay down a portion of the revolver.

The outlook revision reflects a belief that recent actions taken by management, including the cancellation of its Sugarcane Bay project and solid performance in the quarter that ended March 31, have alleviated concerns about execution risk and heightened debt leverage, S&P said.

The proposed new notes will serve to extend any meaningful debt maturities to 2014, which also enhances the company's financial flexibility, the agency said.

Still, credit measures are expected to remain somewhat weak for the current rating, S&P added.

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