S&P rates AGS notes B-

Standard & Poor's said it assigned a B- corporate credit rating to AGS Holdings LLC.

The agency also said it assigned a preliminary B- rating with a preliminary recovery rating of 3, indicating 50% to 70% expected recovery in a default, to the company's proposed $150 million senior secured notes due 2017.

The outlook is negative.

The proceeds from the proposed notes, along with a $30 million equity contribution from its sponsor Alpine Investors, will be used to repay its existing credit facility, buy out the existing Bluberi Gaming Technologies distribution agreement and repay a portion of holding company notes.

While not yet committed, AGS also plans to enter into a new $20 million revolving credit facility some time after the closing of the proposed senior secured notes transaction, S&P said, and this was factored into the recovery analysis.

Absent the addition of a revolving credit facility, the expectation of recovery on the senior secured notes improves to the high end of the 50% to 70% range and the recovery rating would remain a 3, S&P said.

The existing ratings of AGS LLC, a wholly owned subsidiary of AGS Holdings LLC and the borrower under the current credit facility, remain unchanged, including the B- corporate credit rating.

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