Moody's: Hard Rock view now stable

Moody's Investors Service said it has affirmed Hard Rock Hotel, Inc.'s B2 corporate family rating and changed the outlook back to stable from developing.

This rating action was prompted by the announcement that the company had entered into an agreement and plan of merger with Morgans Hotel Group and related entities.

Morgans will acquire the Hard Rock Hotel, Inc. for $421 million as well as adjacent land and other related assets from Peter Morton for another $349 million for a total transaction value of $770 million.

The stable outlook reflects Moody's expectation that the company's $200 million 8.75% second-lien notes due 2013 will be repaid upon closing of the merger at which time the ratings would be withdrawn.

Moody's noted that pursuant to the bond indenture governing the second-lien notes due 2013, the transaction is likely to result in a change of control thereby requiring the company to offer to repurchase the notes.

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