Moody’s: Montreign loan B2

Moody's Investors Service said it assigned a B3 corporate family rating to Montreign Operating Co., LLC, along with a B3-PD probability of default rating.

The agency also said it assigned a B2 rating to the company's proposed $375 million senior secured first-lien term loan due 2022.

The outlook is stable.

The proceeds from the $375 million first-lien term loan, along with a $57 million second lien payment-in-kind note (unrated), $70 million of vendor financing (unrated) and $301 million of cash equity invested to date will be used to finish the construction of the $684 million Montreign Resort Casino, which is scheduled to open in March 2018, the agency said.

The ratings consider that a significant amount of casino supply already exists within a 200 mile radius of where Montreign will be located, Moody’s said.

Montreign will be competing for customers with other large, established competitors in New York, Pennsylvania and Connecticut, the agency added.

The success of Montreign's casino relies on not only growing the gaming market in New York, but attracting players from the existing competitors, Moody’s said.

The agency said it expects that the company’s debt-to-EBITDA ratio after the first year of operations will be relatively high at between 5x and 5.5x.

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