Moody's lowers Choctaw, rates loan Caa2

Moody's Investors Service said it downgraded Choctaw Resort Development Enterprise's corporate family and probability of default ratings to Caa3 from Caa2, along with its senior unsecured notes rating to Caa3 (LGD 4, 56%) from Caa2 (LGD 4, 56%).

The agency also said it assigned a Caa2 (LGD 3, 41%) rating to the senior secured term loan with the new maturity date of May 4, 2012.

The outlook is negative.

The downgrades conclude a review that began in July.

The ratings reflect the significant near-term refinancing risk that the company faces despite its recent execution of an extension of the maturity dates on two of its loans, Moody's said.

The near-term probability of a payment-default remains high due to uncertainty that the company will be able to complete the refinancing of these loans within such a short timeframe, the agency said.

Other potential risks include further delays in financial reporting and accounting restatements due to the recent change in Choctaw's external auditor, Moody's said, and continued weak corporate governance.

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