S&P rates Boyd loans BB-

Standard & Poor's said it assigned its BB- issue-level rating to Boyd Gaming Corp.'s existing credit facility, with a recovery rating of 1, indicating the agency's expectation for very high recovery for lenders in the event of a payment default.

At the same time, S&P said it assigned its preliminary BB- issue-level rating and a preliminary recovery rating of 1 to Boyd's proposed $300 million incremental term loan.

In addition, S&P said it revised its recovery rating on Boyd's $500 million senior notes to 4, indicating an expectation of average recovery for lenders in the event of a payment default, from 3.

The issue-level rating on the notes remains B, in accordance with S&P's notching criteria for a 4 recovery rating. The recovery rating revision reflects an increase in secured debt under S&P's simulated default scenario as a result of the planned term loan offering, the agency said.

S&P said it also affirmed the B corporate credit rating on the company. The outlook is stable.

"The corporate credit rating reflects our assessment of Boyd's financial risk profile as highly leveraged, given the company's high debt leverage, modest covenant cushion over the next few quarters, and the potential need - based on our current performance expectations - to seek covenant relief to address step-downs in the total leverage covenant in 2012," S&P credit analyst Melissa Long said in a news release.

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