S&P: American Casino on watch

Standard & Poor's said it revised its CreditWatch listing on American Casino & Entertainment Properties LLC to negative from developing.

The agency said that this revision follows the announcement by American Casino's parent company, American Real Estate Partners LP (BB+/stable) that it has agreed to sell American Casino to Whitehall Street Real Estate Funds for $1.3 billion.

The agency said it believes that, given the transaction multiple of well more than 10 times, based on American Casino's 2006 EBITDA, debt leverage would increase materially and weaken credit protection measures due to the high likelihood for additional debt to fund the acquisition.

However, the company's existing senior note issue does contain a provision whereby American Casino must offer to repurchase the notes at 101% upon a change of control, the agency added.

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