Moody's ups, rates Golden Nugget loans B1

Moody's Investors Service said it raised Golden Nugget, LLC's corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD. Additionally, Moody's assigned a B1 rating to the company's planned $500 million first-lien senior secured revolver and $1.85 billion first-lien senior secured term loan. All other ratings remain unchanged. The outlook remains positive.

"The upgrade and positive outlook reflects Golden Nugget's improving operating trends and more favorable cost structures at both its restaurants and casinos that we expect to result in stronger credit metrics and liquidity despite higher debt levels," stated Bill Fahy, a Moody's senior credit officer, in a press release.

Loan proceeds, along with about $3.7 billion of new secured and unsecured debt will be used to refinance Golden Nugget's debt, fund a $250 million dividend and put more cash on the balance sheet.

The refinancing will boost funded debt which will limit the improvement in credit metrics. “Moody's estimates that pro forma for the proposed transaction leverage will be about 6.9 times for the LTM period ending September 2021 but when coupled with improving operating performance and the maintenance of a lower cost structure is expected to result in debt to EBITDA improving towards six times over the next 12 to 18 months,” the agency said in a press release.

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