Fitch ups Pinnacle loan, to rate loan BB+, notes BB-

Fitch Ratings said it expects to rate Pinnacle Entertainment, Inc.'s proposed $2.6 billion senior secured credit facility BB+/RR1 and up to $800 million in new senior unsecured notes BB-/RR3.

Fitch also took the following rating actions on Pinnacle:

• Upgraded the issuer default rating to B+ from B;

• Upgraded the existing senior secured credit facility to BB+/RR1 from BB/RR1;

• Affirmed the existing senior unsecured notes at BB-; recovery rating revised to RR3 from RR2; and

• Affirmed the subordinated unsecured notes at B-; recovery rating revised to RR6 from RR5.

The outlook was revised from positive to stable and the Rating Watch Negative on Pinnacle's unsecured senior and subordinated notes was removed.

Fitch said it also expects to assign a BB-/RR3 to Ameristar Casino's existing 7½% senior unsecured notes being assumed by Pinnacle once the acquisition closes.

The credit facility will include a $1 billion revolver and a $1.6 billion term loan. The proceeds from the credit facility and the new notes will be used to pay a $959 million cash consideration to Ameristar's shareholders, refinance $450 million of Pinnacle's 8 5/8% senior unsecured notes due 2017, repay about $1.2 billion outstanding on Ameristar's and Pinnacle's existing facilities and pay transaction costs.

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