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S&P cuts Majestic Star
Standard & Poor's said it lowered the corporate credit rating on Majestic Star Casino LLC to B- from B and removed it from CreditWatch, where it was placed Sept. 10 with negative implications.
S&P also lowered the $80 million senior secured revolving credit facility to B+ from BB- and affirmed the rating on the company's 9½% senior secured notes at B+.
The outlook is negative.
According to the agency, the rating downgrade follows increased deterioration in Majestic Star's liquidity position and weakening credit measures due to continued negative operating trends.
The B- rating reflects the company's substantial debt levels, second-tier properties and moderate cash flow base as well as its limited market position in highly competitive markets, S&P said.
The issuer's debt-to-EBITDA ratio, adjusted for operating leases and including the senior discount notes issued at Majestic Star Holdco LLC, was 8.7 times.
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