S&P might up MTR Gaming, cut Eldorado

Standard & Poor's said it placed all ratings, including its B- corporate credit rating, on MTR Gaming Group Inc. on CreditWatch with positive implications.

At the same time, the agency placed its ratings, including the B+ corporate credit rating, on Eldorado Resorts LLC on CreditWatch with negative implications.

MTR and Eldorado announced on Sept. 9 that they entered into a definitive agreement, under which MTR will combine with the parent company of Eldorado in a stock merger. The merger will include the 50% interest in the Silver Legacy (not rated), a joint venture between Eldorado's majority owners and MGM Resorts International.

S&P said the positive CreditWatch listing on MTR reflects the potential for higher ratings, given the merger for MTR into a currently higher-rated entity, and the expectation that geographic diversity will increase, pro forma for the combined company.

The negative CreditWatch listing on Eldorado reflects the expectation that, if the merger is completed, adjusted leverage for the combined companies will be at least in the mid-5x area over the intermediate term (compared with current leverage for Eldorado in the low-4x area), the agency said.

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