Moody's rates East Valley notes B1

Moody's Investors Service said it assigned a B1 (LGD4, 56%) rating to the East Valley Tourist Development Authority's $275 million fixed-rate senior secured notes due 2015. The authority's B1 corporate family and probability-of-default ratings were affirmed, and the outlook is stable.

The authority is an instrumentality of the Cabazon Band of Mission Indians. Proceeds from the new note offering will be used to repay a $172 million interim bridge loan facility, to repay $61 million of debt incurred by the tribe to support casino resort projects, to make a $15 million distribution to the tribe, to reimburse the tribe for costs related to development of the Eagle Falls Golf Course and to fund general business purposes.

The agency said the ratings consider the authority's high pro forma debt-to-EBITDA ratio of about 6.2x, its small single-asset profile and the significant amount of competition already operating in its primary and secondary market areas.

Positive rating consideration is given to the authority's good historical performance in terms of growth trends and operating margins and the favorable demographics and growth trends of the southern California gaming market, Moody's said.

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