Moody's rates Shingle notes B3

Moody's Investors Service said it assigned a B3 (LGD4, 52%) rating to Shingle Springs Tribal Gaming Authority's $450 million senior notes due 2015, along with a B3 corporate family rating and B3 probability-of-default rating.

The outlook is stable.

Proceeds will be used to fund a highway construction and a $584 million Foothills Oaks Casino development project. The casino is scheduled to open in the fourth quarter of 2008.

The ratings reflect the issuer's debt-financed development plans, pro forma small size and single asset profile, the agency said. The ratings also consider the area's several large casinos already operating in Foothill Oaks' primary market area and the uncertainty about the pending litigation with Sharp Image Gaming.

The stable outlook reflects the project's good risk-to-reward profile given the established nature and favorable demand in the casino's primary and secondary market area and Moody's expectations that Shingle Springs' pro forma debt-to-EBITDA ratio will stay below 5 times, that the issuer can obtain a $65 million financing for furniture, fixture and equipment and that the casino and highway interchange will be constructed on time and on budget.

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