S&P: MTR outlook negative

Standard & Poor's said it revised its outlook on MTR Gaming Group Inc. to negative from stable and affirmed ratings on the company, including the B+ issuer credit rating.

The outlook revision reflects S&P's concern about MTR's tight cushion relative to its credit agreement financial covenants, as the thresholds tighten substantially over the next few quarters. The agency said steady EBITDA growth will be necessary in order to avoid a covenant violation, but operating conditions across the gaming industry are being challenged by a weak economy.

The B+ rating reflects MTR's high levels of debt leverage and the competitive threat posed by the Pennsylvania gaming market to the company's largest gaming property - the Mountaineer Casino, Racetrack & Resort in Chester, W.Va., S&P said.

These concerns are somewhat tempered by the solid operating performance at the company's newest property, Presque Isle Downs in Erie, Pa., the agency added.

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