Moody's cuts Choctaw Resort

Moody's Investors Service said it downgraded Choctaw Resort Development Enterprise's corporate family and probability-of-default ratings to Ba3 from Ba2.

The agency lowered the senior unsecured notes due 2019 to Ba3 (LGD4, 56% from 57%) from Ba2 and the senior secured term loan due 2011 to Ba3 (LGD3, 42% from 44%) from Ba2.

The outlook was changed to negative from stable.

Moody's said the actions reflect Choctaw Resort's poor year-to-date operating performance, increase in financial leverage and reducing leeway under a financial covenant, as well as the risk of further EBITDA erosion.

The agency said Choctaw Resort's financial metrics as of June 30 were still solid for the Ba category, with a total debt-to-EBITDA ratio of less than 3 times, but noted Choctaw Resort's financial profile has deteriorated over recent months and is expected to remain pressured in the near term.

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