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S&P rates Sugarhouse notes B-
S&P said it affirmed the B- corporate credit rating on Sugarhouse HSP Gaming Prop. Mezz. LP.
The outlook is stable.
The agency also said it assigned a B- rating to Sugarhouse's proposed $300 million senior secured notes due 2025.
The recovery rating is 4, indicating 30% to 50% expected default recovery.
The proceeds from the proposed notes, and from the proposed $95 million super priority revolver, will be used to repay amounts outstanding under its current revolver, refinance its outstanding $240 million second-lien notes, pay redemption premiums and for transaction fees and expenses, S&P said.
The ratings reflect an expectation that despite very high adjusted leverage and very weak EBITDA coverage of total interest expense, Sugarhouse will maintain good EBITDA coverage of cash interest expense and adequate liquidity, the agency said.
S&P also said it anticipates leverage to be more than 10x through 2018 and EBITDA coverage of total interest expense to be about 1x.
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