S&P lowers Isle of Capri

Standard & Poor's said it lowered its ratings on Isle of Capri Casinos Inc., including the corporate credit rating to B+ from BB- and its 7% senior subordinated notes due March 1, 2014 to B- from B, and removed them from CreditWatch, where they were placed with negative implications March 6.

The agency also assigned a recovery rating of 6 to the notes.

The outlook is negative.

The agency said the downgrade and negative outlook reflect credit measures that have been weak for the rating for an extended period, resulting from a shortfall in EBITDA generation relative to S&P's previous expectations. S&P attributed Isle's inability to improve credit measures at the expected pace to a slower ramp-up at the company's Pompano Park, Waterloo and Coventry properties, as well as weakness in operating performance at several of Isle's other properties.

The B+ rating reflects Isle's highly leveraged capital structure, vulnerability to competitive pressures due to the second-tier market position of many of its properties and a historically aggressive growth strategy, the agency said.

These factors are somewhat tempered by the geographically diverse portfolio of the company's gaming assets and the company's experienced management team, S&P added.

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