S&P drops Herbst notes

Standard & Poor's said it lowered its rating on Herbst Gaming Inc.'s 8.125% senior subordinated notes due 2012 to D from C, following the company's failure to make an interest payment on June 1.

Herbst announced in an NT 10-Q filing on May 16 that it would not make the June 1 payment on these notes after receiving a payment blockage notice from the administrative agent under the amended credit agreement, which states that no payments can be made with respect to any of its subordinated notes as a result of an event of default, S&P said.

The agency stated at that time that it would lower its rating to D on the subordinated notes once the payment was missed.

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