S&P puts Gaylord Entertainment on positive watch

Standard & Poor's said it placed the B corporate credit and other ratings on Gaylord Entertainment Co. on CreditWatch with positive implications.

The CreditWatch listing follows news that Gaylord plans to develop a 1,500-room branded hotel and convention center in the Denver metropolitan market for an anticipated cost of $800 million, S&P said.

The agency said it believes the news clarifies spending levels for Gaylord's expansion strategy over the next several years in a manner that would be consistent with a one-notch higher rating.

The development is likely to be a good addition of a high quality property in a leading Western U.S. convention market, which is in line with Gaylord's long-standing distribution expansion strategy, S&P said.

Although details of the development financing have not been announced, the agency said it anticipates that even if it is funded solely by Gaylord from a combination of cash balances, cash flow and debt, leverage is likely to be less than 6x starting in 2012.

S&P said it will resolve the CreditWatch listing following the completion of a review and after the financing plan in detailed.

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