Moody's assigns Chester Downs notes B3 rating

Moody's Investors Service said it assigned a B3 rating to Chester Downs and Marina, LLC's proposed $315 million senior secured notes due 2020.

Moody's affirmed Chester's B3 corporate family rating and will withdraw the B3 rating of its senior secured term loan once the transaction closes and the debt is extinguished. At the same time, Chester's probability of default rating was upgraded to B2 from B3.

The outlook is stable.

Moody's said the ratings reflect Chester's small size, single property concentration risk, and high leverage (pro-forma debt/EBITDA about 4.7x) relative to the company's scale and limited diversification.

Additionally, Chester could face additional competition in 2013, if nearby competitor SugarHouse decides to move forward with the approved expansion of its existing facility, the agency said.

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