Moody's rates Great Wolf notes B3

Moody's Investors Service said it assigned a B3 (LGD3, 33%) rating to the proposed $225 million guaranteed first mortgage notes due 2017 of GWR Operating Partnership, LLLP, which is a subsidiary of Great Wolf Resorts, Inc. The agency also assigned Caa1 corporate family and probability-of-default ratings to the company.

The outlook is stable.

Proceeds from the proposed notes will be used to refinance existing mortgage debt at three properties.

The agency said the ratings reflect the company's very high leverage, very weak interest coverage, small scale, narrow business focus, highly complex legal and capital structure and a material weakness in connection with the preparation of its financial reports for the quarter ended Sept. 30.

Factors supporting the ratings include the company's relatively strong brand recognition within the niche segment in which it operates, the good asset values supporting the first mortgage notes and adequate liquidity, Moody's said.

For the 12 months ended Dec. 31, the debt-to-EBITDA ratio was more than 9 times.

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