S&P rates new Harrah's notes BBB-

Standard & Poor's said it assigned its BBB- rating to Harrah's Operating Co. Inc.'s proposed $500 million 5.375% senior notes due Dec. 15, 2013, and affirmed its BBB- long-term and A-3 short-term corporate credit ratings on Harrah's Operating Co.

In addition, the BBB- corporate credit rating on Harrah's Entertainment was affirmed. The outlook is stable.

S&P said that In September, Harrah's announced it was acquiring the assets of Horseshoe Gaming Holding Corp. for about $1.45 billion in an all-cash transaction. While the transaction was initially expected to close during the first quarter of 2004, subject to shareholder and regulatory approval, it is now more likely to close by the end of the 2004 second quarter due to the request by regulators for more information about the affect of the deal on competition among casinos in certain markets.

S&P said the ratings for Las Vegas-based Harrah's reflect the company's well-diversified and good-quality portfolio of casino properties, the addition of the Horseshoe brand, the company's experienced management team, and its relatively stable cash flow base. The ratings further incorporate the company's well-regarded existing brand names and innovative marketing systems and customer loyalty program.

These factors are offset by competitive market conditions in several of Harrah's markets, evolving regulatory landscapes and pro forma credit measures that provide little room for weakening within the current rating and outlook.

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