S&P rates HRP Myrtle Beach notes B, CCC+

Standard & Poor's said it assigned a B- corporate credit rating to HRP Myrtle Beach Holdings LLC, a B rating with a recovery rating of 1 to HRP Myrtle Beach Operations LLC's $155 million floating-rate senior secured notes due 2012 and a CCC+ rating with a recovery rating of 3 to its $100 million junior secured notes due 2013. The outlook is developing.

Proceeds will be used to finance the design, development and construction of Hard Rock Park, a rock-and-roll theme park in Myrtle Beach, S.C., under a long-term license agreement with Hard Rock International. Proceeds will also fund an interest reserve account to pay the first five semi-annual interest payments on the notes.

S&P said the ratings reflect the company's narrow business position as a future operator of a single theme park, construction risks associated with developing the facility (planned to open in 2008), competition with other family-oriented attractions and expected challenges associated with developing a loyal repeat customer base. Also, the company's high pro forma debt leverage and the moderate-sized EBITDA base required to support it increase the risks that a slower-than-expected ramp-up period could strain the company's liquidity.

These factors are only partially offset by the company's experienced management team, the agency said.

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