S&P assigns Silverton Casino B

Standard & Poor's said it assigned its B corporate credit rating to Silverton Casino LLC.

The outlook is stable.

Concurrently, S&P said it assigned its issue-level and recovery ratings to the planned $215 million second mortgage notes due 2015, to be issued jointly by affiliates Silverton Casino LLC, Majestic Nevada Property Holdings LLC and Silverton Finance Corp., adding that the notes were rated B- with a recovery rating of 5.

Net proceeds from the $515 million of debt financing, including the expected $300 million senior secured credit facility (not rated), together with a $23.5 million cash equity contribution and $20 million in free cash flow, will principally be used to fund $485 million in costs related to the expansion of the Silverton Hotel & Casino, the agency said.

According to S&P, the B rating on Silverton Casino reflects the challenges associated with the company's strategy of attracting a more upscale base of visitors, the highly competitive nature of the Las Vegas market, the company's reliance on a single property and modest construction risks.

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