Moody's lowers Galaxy

Moody's Investors Service said it has downgraded the corporate family rating and senior unsecured debt rating of Galaxy Casino SA to B3 from B1.

The outlook for both is negative.

This concludes the rating review initiated on Nov. 21, the agency said.

"The downgrade reflects Moody's expectation that Galaxy's credit profile will remain weak in the near-to-medium term due to lower than expected cash flow generation in the context of a tough gaming market and delayed opening of the Galaxy Macau Resort (formerly known as Cotai Mega Resort) to 2010," said Kaven Tsang, Moody's lead analyst for Galaxy.

"There is a high likelihood of further delay in the opening of the resort given the uncertain market environment and if Galaxy cannot replenish the liquidity applied for buying back its dollar bond in the next 12 months. As a result, the company will have increased funding needs arising from the further delay to service its projected capex and scheduled debt repayment in the medium term," said Tsang.

"However, the tightened global credit environment will add material uncertainty to Galaxy's fund raising activities in the near-to-medium term," added Tsang.

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