Moody's: SugarHouse notes B3

Moody's Investors Service said it affirmed SugarHouse HSP Gaming Prop. Mezz, LP's corporate family and probability of default ratings at B3.

The agency also said it assigned a B3 (LGD 4, 55%) rating to its proposed $235 million of second-lien senior secured notes due 2016.

The outlook is stable.

The proceeds will be used to refinance the company's $10 million B3-rated revolver expiring 2014, $185 million B3-rated term loans due 2014, $21 million unrated term loan due 2014, and $20 million of outstanding furniture, fixture and equipment loans.

Moody's said it will withdraw the ratings on the company's revolver and term loans once the transaction closes.

The affirmations reflect the company's small, single-asset profile and limited operating history, the agency said.

SugarHouse is still going through its critical ramp-up period with no assurance that the casino will meet its longer-term financial targets, Moody's said, adding that it expects the company will only generate net revenue of between $220 million and $240 million in its first full year of operations.

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