Moody's rates Choctaw Resort loan Ba3

Moody's Investors Service said it assigned a Ba3 rating to Choctaw Resort Development Enterprise's new $143.8 million senior secured term loan due 2011. At the same time, Enterprise's Ba3 senior implied rating, B1 long-term issuer rating, and B1 rated $200 million 9¼% senior notes due 2009 were affirmed.

The outlook is stable.

Proceeds from the new term facility along with an expected high-yield note offering will be used to tender for the Enterprise's existing 9¼% senior notes due 2009, repay outstanding revolver borrowings, and pay related fees and expenses.

Moody's said the Ba3 senior implied rating considers the Enterprise's stable operating results and lack of competition in its immediate market area. Positive rating consideration is also given to the Enterprise's relatively low leverage. Pro forma for the new senior note and term loan, debt/EBITDA is about 2.5 times. The new term loan facility limits total debt/EBITDA to 3.0x through September 2005 and 2.75x after that.

Key credit concerns, Moody's said, include the Enterprise's dependence on a single market area, slower-than-expected ramp-up at the Golden Moon which opened in August 2002, and Moody's expectation Enterprise will continue to distribute most of its operating cash flow to the tribe.

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