Moody's rates Cannery Casino loans B2, Caa1

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings and a loss-given-default assessment of LGD4 (50%) to Cannery Casino Resorts, LLC, B2 (LGD3, 44%) ratings to its $75 million five-year first-lien guaranteed revolver, $350 million six-year first-lien guaranteed term loan and $320 million six-year first-lien guaranteed delayed draw term loan and a Caa1 (LGD6, 93%) rating to its $115 million seven-year second-lien guaranteed term loan.

The outlook is stable.

The new loans will be used to refinance existing debt, to construct a permanent casino in western Pennsylvania and to redevelop the Nevada Palace casino in Las Vegas.

The agency said the ratings reflect development and ramp-up risk in the emerging western Pennsylvania market, competition with larger companies in the Nevada locals market, concerns the organization may be stretched managing two projects simultaneously and high pro forma leverage.

Key positive rating considerations are diversification of property revenues, the low risk profile of the Las Vegas casino, the successful development and operational track record of the company's management and solid liquidity, Moody's said.

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