Moody's downgrades Centaur

Moody's Investors Service said it lowered Centaur, LLC's corporate family rating and probability-of-default ratings to Caa3 from Caa2, first-lien term loan and revolving credit facility to B3 (LGD2, 18%) from B2 (LGD2, 20%) and second-lien term loan to Caa3 (LGD4, 58%) from Caa2 (LGD4, 61%).

The outlook is negative.

The rating actions reflect Moody's lower earnings expectations for the Hoosier Park racino in Indiana, which could compromise the company's ability to meet its material debt service burden in the near term, and the agency's fears that the near-term sale of the Valley View Downs assets in Pennsylvania, which is critical for Centaur's going-concern operations, could prove challenging.

The agency said that from a liquidity standpoint, it is also concerned by the tightness of the interest coverage covenant in the next few quarters.

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