S&P may cut Kerzner

Standard & Poor's said it placed its ratings on Kerzner International Hotels Ltd., including its BB corporate credit rating, on CreditWatch with negative implications.

The rating action follows the company's announcement that it has further increased spending associated with its Phase III expansion project for Atlantis on Paradise Island, Bahamas. Given the greater spending, in addition to the company's previously announced growth initiatives, debt leverage is now likely to increase beyond S&P's expectations.

S&P said it has determined that if a downgrade were to occur, it would be limited to one notch.

Ratings on watch include Kerzner International Hotels' BB senior secured debt and B+ subordinated debt.

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