S&P assigns Downstream Development notes B-

Standard & Poor's said it assigned its B- rating to Downstream Development Authority's proposed $197 million senior secured notes due 2015.

The agency said that the notes will be sold privately under Rule 144A of the Securities Act of 1933 and they replace the previously proposed $235 million senior notes issuance, which was rated on July 13.

Proceeds from the notes, together with a subordinated note issue and a committed $25 million furniture and equipment loan, as well as a planned vendor financing, will be used to fund the construction and development of the Downstream Casino Resort in northeast Oklahoma at the border of Missouri, S&P said.

The corporate credit rating on the authority is B- and the rating outlook is negative, S&P said.

"The rating reflects our view that the facility's border location is somewhat challenged given a relatively small population in close proximity to the proposed resort, a high degree of competition and high pro forma debt levels based on our estimates for operating metrics," said S&P credit analyst Ariel Silverberg.

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