S&P: Speedway outlook negative

Standard & Poor's said it assigned a BB issue and 3 recovery rating to Speedway Motorsports Inc.'s proposed $250 million senior unsecured notes due 2016.

The agency also lowered the $330 million senior subordinated notes to B+ from BB with 6 recovery rating. The corporate family rating is BB.

The outlook was revised to negative from stable.

Proceeds will be used to reduce outstanding borrowing under the company's revolving credit facility.

"The outlook revision reflects our concerns that the recession will resulting in a double-digit decline in both revenues and EBITDA, pushing lease adjusted debt leverage above 3.3x, and narrowing compliance with the existing credit facility's covenants," S&P analyst Andy Liu said in a statement.

The BB rating reflects Speedway Motorsports' concentrated earnings profile, uncertainty regarding the earnings potential of its Kentucky Speedway acquisition and relatively high debt leverage, the agency said.

The company's good market position in the motorsports industry and high barriers to entry are positives, the agency noted.

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