S&P: Boyd Gaming ratings unaffected by asset purchase

Standard & Poor's said Wednesday that its credit rating and outlook on Boyd Gaming Corp. (BB/stable/--) remain unchanged by the announcement that Boyd had entered into an agreement to purchase the Harrah's Shreveport Hotel & Casino from Harrah's Entertainment Inc. (BBB-/stable/A-3).

The purchase price for the Shreveport property is $190 million. The transaction is expected to close during mid-2004, subject to regulatory approval.

S&P said it expects no meaningful change in Boyd's overall financial profile due to the planned acquisition. Based on the 12 months ended September, pro forma operating lease adjusted debt to EBITDA remains at 4.4x.

Meanwhile, over the long term the acquisition is expected to be a good addition to Boyd's portfolio due to the quality of the asset and the potential for longer-term market growth. In addition, S&P said upside potential for the property is two to three years away and depends upon new competition being absorbed and an improved regional economy, particularly in the important Dallas/Fort Worth feeder market.

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