S&P: Graton Economic Development loan, notes B

Standard & Poor's said it assigned a B issuer credit rating to Graton Economic Development Authority.

The outlook is stable.

The authority is a wholly owned unincorporated instrumentality of the Federated Indians of Graton Rancheria.

The agency also assigned a B rating to the authority's $375 million senior secured term loan due 2018 and $450 million in senior secured notes due 2019.

The senior secured term loan and senior secured notes are pari passu.

The authority also raised a $25 million priority revolving credit facility, which is not rated.

The rating reflects the tribe's weak business risk profile and highly leveraged financial risk profile, S&P said.

The ratings also consider the vulnerability of new gaming projects to uncertain demand and difficulties managing initial costs, which can lead to poor profitability during the first several months of operations, the agency said.

These risks are somewhat mitigated by an expectation for the property to be the highest asset quality in proximity to the San Francisco market, a somewhat protected market position, S&P said.

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