Moody's upgrades Snoqualmie

Moody's Investors Service said it raised Snoqualmie Entertainment Authority's corporate family and probability-of-default ratings to Caa1 from Caa3 and its $130 million floating-rate senior notes due 2014 and $200 million 9 1/8% senior notes due 2015 to Caa1 (LGD3, 44%) from Caa3 (LGD3, 46%) after it successfully amended its credit agreement and improved its operating performance.

The outlook is positive.

The agency said the upgrade reflects Snoqualmie's diminished near-term default probability after it completed an amendment to its furniture, furnishing and equipment loan agreement, alleviating Moody's previous concern about a potential covenant violation should the amendment not be entered into on time.

The Caa1 corporate family rating balances Snoqualmie's single-asset profile, short operating history and inherently volatile operating performance against Snoqualmie Casino's favorable location and strong demographic in its primary Seattle market, Moody's said.

The positive outlook considers the possibility of a further upgrade should Snoqualmie sustain operating performance at its current level and continue to pay down debt that would result in a debt-to-EBITDA ratio of below 5 times, the agency said.

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