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Moody's may downgrade Lake at Las Vegas
Moody's Investors Service said it placed Lake at Las Vegas Joint Venture and its co-issuer, LLV-1 LLC, under review for possible downgrade, including the B2 corporate family rating and B2 senior secured bank credit facility.
The review follows indications that the much slower-than-expected absorption rates of lot sales may be causing difficulty in meeting certain of the company's financial covenants, the agency said.
Moody's review will focus on Lake at Las Vegas' ability to build and maintain liquidity in the face of a weak bulk lot sales environment and the willingness of its bank group to renegotiate its covenants, the most restrictive of which is the 2x EBITDA to interest coverage test over a trailing 12 month period. The review will also focus on Lake at Las Vegas' ability to defer spending and its success in obtaining possible additional sources of capital, if needed, in order to meet its funding requirements.
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