Moody's may downgrade Waterford Gaming

Moody's Investors Service said it placed the ratings of Waterford Gaming LLC and its wholly owned subsidiary and co-issuer, Waterford Gaming Finance Corp., on review for possible downgrade, including the B1 corporate family rating, Ba3 probability-of-default rating and B1 senior unsecured notes.

The review follows a similar action on Mohegan Tribal Gaming Authority taken in response to the authority's weaker operating performance in a challenging economic and competitive environment. The agency said Waterford derives substantially all of its revenues from its partnership interest in Trading Cove Associates, which itself receives a revenue-based relinquishment fee equal to 5% of the gross revenues of the Mohegan Sun casino owned by the authority.

During its review, Moody's will assess the potential implications of the authority's deteriorating operating performance and financial profile on the amount of cash distributions to Waterford and the company's continuous ability to meet its coupon payments and delever its balance sheet.

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