S&P downgrades Kerzner

Standard & Poor's said it lowered its ratings on Kerzner International Hotels Ltd., including its corporate credit rating to BB- from BB. S&P also lowered the bank loan rating to BB- from BB and the subordinated debt rating to B from B+.

The outlook is stable.

S&P said the downgrade considers higher-than-expected growth-oriented spending during a period when there is limited flexibility in the prior rating category.

S&P noted the ratings on Kerzner reflect a high cash flow concentration from Paradise Island, an active growth strategy, and the expectation that credit measures will weaken meaningfully from current levels as the company funds various growth opportunities. These factors are offset by steady operating performance of its Paradise Island, Bahamas, operations (Atlantis and the Ocean Club), the company's good position as a manager of luxury resort hotels, and the expected reliable cash flow stream from the Mohegan Sun casino in Connecticut.

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