S&P rates Midwest Gaming, notes B, loan BB-

Standard & Poor's said it assigned its B corporate credit rating to Midwest Gaming Borrower LLC.

The outlook is negative.

At the same time, the agency said it assigned the company's $120 million senior secured first-lien credit facilities, consisting of a $10 million revolving credit facility and a $110 million delayed-draw term loan, its issue-level rating of BB- while it assigned this debt its recovery rating of 1.

In addition, the agency said it assigned the company's $175 million senior secured second-lien notes an issue-level rating of B with a recovery rating of 4.

S&P added that the notes will be co-issued by Midwest Gaming Finance Corp., a subsidiary of Midwest Gaming Borrower.

Proceeds from the proposed debt offerings, along with about $150 million of equity contributed by the equity sponsors and $10 million of vendor financing, will be used to fund the construction costs of the Des Plaines Casino, a $125 million license fee, and other transaction expenses, the agency said.

The B corporate credit rating reflects the risks surrounding Midwest's ability to ramp up internally generated cash flow in sufficient time to cover fixed charges given uncertainties surrounding demand, and difficulties in managing costs typically observed in the first several months of operation of a new gaming project, S&P stated.

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