Moody's may lower Boyd Gaming

Moody's Investors Service said it placed the ratings of Boyd Gaming Corp. on review for possible downgrade after the company announced it had submitted a non-binding preliminary indication of interest to acquire all or a portion of Station Casinos, Inc.

According to the agency, Boyd is interested in exploring an acquisition of 100% of Station's assets other than the assets that secure Station's CMBS mortgage loan and related mezzanine financings and the assets that secure Station's $250 million delay-draw term loan.

The review for possible downgrade will focus on: 1) Boyd's capital structure should an acquisition of Station occur; 2) the company's acquisition appetite for other opportunities if a deal for Station is not consummated; and 3) Boyd's operating results, particularly in the Las Vegas locals market that accounts for over 50% of wholly-owned property level EBITDA.

Affected ratings include the company's corporate family rating at Ba3, probability of default rating at Ba3, $250 million senior subordinated notes 2016 at B2, $269 million senior subordinated notes due 2012 at B2, $350 million senior subordinated notes due 2014 at B2 while Boyd's SGL-2 speculative-grade liquidity rating remains unchanged.

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