S&P rates Fontainebleau, loan B

Standard & Poor's said it assigned its B corporate credit rating to Fontainebleau Las Vegas Holdings LLC.

The outlook is negative.

At the same time, S&P said it assigned its loan and recovery ratings to the proposed $1.85 billion senior secured credit facility to be borrowed by subsidiary Fontainebleau Las Vegas LLC and its affiliate, Fontainebleau Las Vegas II LLC.

The facility consists of a $1 billion revolving credit due 2012 and an $850 million delayed draw term loan due 2014, the agency said, adding that this secured debt is rated B with a recovery of 2, indicating the expectation for substantial recovery of principal in the event of a payment default.

The agency said that proceeds from the proposed bank facility, combined with expected second mortgage notes and equity contributions, will be used to help fund the construction of the company's $2.4 billion Fontainebleau Resort & Casino on the Las Vegas Strip.

According to S&P, the corporate credit rating on Fontainebleau reflects its high amount of peak debt, execution risk in building and operating a property of this size, the presence of well-established competitors with greater financial resources, a somewhat disadvantaged market location and reliance on a single source of cash flow.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.