Moody's eyes Sugarhouse HSP for cut

Moody's Investors Service said it placed the ratings of Sugarhouse HSP Gaming Prop. Mezz, LP on review for downgrade following an order by Philadelphia that casinos and other indoor dining and gathering venues within the city limits close through Jan. 1.

The order is in response to a rise in coronavirus cases in the area and is effective Nov. 20, Moody’s said.

Ratings placed under review include the company's B3 corporate family rating, B3-PD probability of default rating, Ba3 rating on its $95 million super-priority revolver and Caa1 rating on its senior secured notes.

“The review for downgrade considers that Sugarhouse derives all its revenue and earnings from Rivers Philadelphia. As a result, this second period of closing will absorb liquidity and increase leverage, which is already high, at 8x for the 12-month period ended Sept. 30, 2020. The review for downgrade also considers Moody's view that the closing could be extended beyond Jan. 1, 2021, if the closing order and other efforts to reduce coronavirus do not occur by that time,” the agency said in a press release.

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