Moody's affirms GWR

Moody's Investors Service said it affirmed GWR Operating Partnership, LLLP's Caa1 corporate family and probability of default ratings, along with the B3 (LGD 3, 33%) rating on its $230 million guaranteed first-mortgage notes due 2017.

Moody's also said it changed the outlook to developing from stable, which was prompted by news that Great Wolf Resorts Inc. entered into a definitive merger agreement with an affiliate of Apollo Global Management, LLC.

The outlook change reflects the uncertainty about the timing, ultimate terms and conditions and the final mix between debt and equity of the transaction if the deal moves forward, the agency said.

The affirmation reflects GWR's high leverage and weak interest coverage, as well as its modest scale, limited diversification and high operating leverage given its fixed-cost base, Moody's said.

The ratings are supported by the company's solid brand recognition, good asset value relative to the first mortgage notes and adequate liquidity, the agency said.

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