Moody's lifts Waterford, rates notes Ba3

Moody's Investors Service said it raised Waterford Gaming, LLC and Waterford Gaming Finance Corp.'s corporate family rating and existing senior notes to Ba3 from B1, raised the probability-of-default rating to Ba2 from Ba3 and assigned a Ba3 rating to its proposed $128.5 million senior notes due 2014.

The outlook is stable.

Proceeds from the new notes will be used to repay the company's existing $101.1 million senior notes due 2012, to pay a $26.5 million dividend to the Waterford Group and to pay related fees and premiums.

The agency said the upgrade recognizes Waterford's improved credit metrics and demonstrated ability to reduce debt. The debt-to-EBITDA ratio for the last 12 months ended June 30 was 3.3 times. Although the proposed refinancing will increase the debt-to-EBITDA ratio to about 3.8x, S&P expects leverage to drop each year going forward to the point where the bonds could be repaid in full several years before the new senior notes mature in 2014.

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