Moody’s raises CBAC, facilities to B3

Moody's Investors Service said it upgraded CBAC Gaming, LLC's corporate family rating to B3 from Caa1, probability of default rating to Caa1-PD from Caa2-PD and first-lien bank credit facilities to B3 from Caa1.

Moody’s said the upgrade reflects the Jan. 17 announcement by Caesars Entertainment Corp. (CEC), Caesars Entertainment Operating Co., Inc. (CEOC), and its Chapter 11 debtor subsidiaries that the U.S. Bankruptcy Court for the Northern District of Illinois confirmed the debtors’ plan of reorganization.

The confirmed plan does not include any contribution from CBAC and includes provisions to resolve all related litigation among the major creditor constituencies, CEC and related parties. The plan confirmation alleviates Moody's concerns that CBAC could be drawn into the restructuring.

"The upgrade reflects the positive ramp up of operations since CBAC opened Horseshoe Baltimore in August 2014 evidenced by improvement in adjusted debt/EBITDA, and EBIT/interest to 5.8x and 1.1x as of the last twelve months ended Sept. 30, 2016, from 8.2x and 0.3x at year end 2015," Moody's analyst Peggy Holloway said in a news release.

However, the opening of MGM National Harbor in December is expected to put pressure on CBAC's net revenues and EBITDA over the next 12 months, the agency added.

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