S&P gives BB- to Rivers Pittsburgh loan, B to notes

S&P said it affirmed its B corporate credit rating on Rivers Pittsburgh Borrower (Rivers). The outlook is stable.

At the same time, S&P assigned Rivers' proposed new $75 million priority revolving credit facility due 2021 an issue-level rating of BB- and a recovery rating of 1, indicating an expectation for very high (90% to 100%) recovery for lenders in the event of a payment default.

In addition, S&P assigned the company's proposed $415 million senior secured notes due 2021 an issue level rating of B and a recovery rating of 3, indicating an expectation for meaningful (50% to 70%; lower half of the range) recovery for noteholders in the event of a payment default.

“The rating affirmation reflects our expectation that, notwithstanding the permanent debt reduction resulting from the repurchase of the unsecured PIK notes held at Rivers' parent (which we included in our credit measures) at a discount, we anticipate the operating environment to remain highly competitive and expect debt to EBITDA to remain above 5x along with funds from operations (FFO) to debt to remain below 12% through 2017,” said S&P credit analyst Stephen Pagano in a news release.

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