S&P rates Creative Casinos CCC+, notes B-

Standard & Poor's said it assigned a preliminary CCC+ corporate credit rating to Creative Casinos LLC.

The outlook is stable.

The agency also said it assigned a preliminary B- rating and preliminary 2 recovery rating to the company's proposed $355 million of senior secured notes due 2019.

The preliminary 2 recovery rating indicates 70% to 90% expected recovery in a default.

Mojito Pointe Capital Inc. and Creative Casinos of Louisiana LLC will be co-borrowers on the notes.

The proposed capital structure will also include a $45 million revolving credit facility, which is not rated.

The proceeds, along with $90 million of preferred equity and $50 million of common equity, will be used to fund about $370 million of development and construction costs for Mojito Pointe, S&P said.

The proceeds will be used to establish an interest reserve account to fund debt service on the revolver during construction and debt service on the notes during construction and for a period of six months after the expected completion of construction, the agency said.

The ratings reflect the company's vulnerable business risk profile and highly leveraged financial risk profile, S&P said.

The ratings also consider the risk associated with developing and opening a new casino, reliance on a single property for cash flow generation, the vulnerability of new gaming projects to uncertain demand and difficulties in managing initial costs, the agency added.

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