S&P keeps Station Casinos on watch

Standard & Poor's said its ratings for Station Casinos Inc., including the BB- corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed Nov. 2, 2006.

The agency said it determined that once potential barriers to the company's pending LBO deal have been eliminated, including a successful shareholder vote, it will lower its existing ratings by one notch, bringing the corporate credit rating to B+.

In turn, the rating on the company's senior unsecured notes will be lowered to B from B+ and the rating on the subordinated notes will be lowered to B- from B, the agency said, adding that the rating outlook is expected to be negative, reflecting credit measures that will be weak even for the B+ rating due to the pending LBO by Fertitta Colony Partners LLC.

In addition, S&P said it today assigned its issue-level and recovery ratings to Station's proposed $500 million secured revolving credit facility, a portion of which will be used to fund the LBO, adding that the loan was rated BB with a recovery rating of 1.

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