S&P: MTR Gaming notes at B-

Standard & Poor's said it assigned a preliminary B- rating to MTR Gaming Group Inc.'s proposed $500 million of senior secured notes, along with a preliminary recovery rating of 3, indicating 50% to 70% expected recovery in a default.

The proceeds, along with cash on hand, will be used to redeem its 9% senior subordinated notes due in 2012 and 12 5/8% senior secured notes due 2014, as well as to fund a portion of the development of a video lottery gaming facility at Scioto Downs in Ohio.

MTR also plans to enter into a new unrated $20 million revolving credit facility due 2016, the agency said.

S&P also said it affirmed its B- corporate credit rating.

The outlook is stable.

The ratings reflect MTR's vulnerable business risk profile, given its limited diversity and competitive pressures facing both of its existing properties, the agency said.

The addition of table games in the Pennsylvania gaming market last year continues to pressure performance at MTR's Mountaineer casino, while recently approved gaming legislation in Ohio will result in additional competition for both of MTR's properties, S&P said.

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