S&P cuts Green Valley Ranch

Standard & Poor's said it lowered the corporate credit rating on Green Valley Ranch Gaming LLC to B- from B and $550 million senior secured first-lien term loan to B from BB- with recovery rating revised to 2 from 1.

The agency lowered the company's $250 million senior secured second-lien term loan to CCC from CCC+ with recovery rating at 6.

The outlook is negative.

S&P said the downgrade reflects concern that ongoing softness in the Las Vegas locals market could drive negative free operating cash flow generation over the next several quarters.

The B- rating incorporates expectation that any additional cash burn over the next several quarters at this property will be modest and that the owners would likely step in to provide liquidity to the extent required to meet debt service obligations, the agency said.

The rating reflects the company's high debt leverage, limited liquidity, reliance on a single source of cash flow and expectation for continued negative trends in net revenues and EBITDAM over the next several quarters, the agency noted.

The property's high quality and good location, along with favorable long-term view of the prospects for the Las Vegas locals market, partially temper these factors, S&P said.

As of Sept. 30, total debt-to-EBITDAM ratio was 8.1x.

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