Moody's rates American Casino notes B2

Moody's Investors Service said it assigned a B2 rating to American Casino & Entertainment Properties LLC and its wholly owned subsidiary American Casino & Entertainment Properties Finance Corp.'s proposed $200 million senior secured notes due 2012.

Moody's also assigned a B2 senior implied rating and a Caa1 senior unsecured issuer rating.

The outlook is stable.

Moody's said the ratings consider American Casino's dependence on a single market and the lack of property-level cash flow diversification. The Stratosphere Casino Hotel & Tower currently accounts for about 65% of total property-level operating cash flow.

Moody's said the ratings also take into account that existing competitors in the Las Vegas locals market such as Station Casinos Inc. (Ba3/stable) and Coast Hotels and Casinos Inc. (Ba3/stable), both of which have already announced expansion plans, have greater financial and operating resources than American Casino.

Positive rating consideration is given to the demonstrated stability of the Las Vegas Strip and Las Vegas locals markets as well as Moody's expectation that Nevada's regulatory environment will remain favorable. Additional consideration is given to the positive free cash flow generating history of the combined properties.

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