Moody's: Herbst outlook now positive

Moody's Investors Service said it revised the outlook of Herbst Gaming Inc. to positive from stable and confirmed the company's existing ratings, including its B2 senior implied rating and B2 rating for its $217 million 10.75% senior secured notes due 2008.

Moody's said the outlook revision acknowledges Herbst's improved financial performance and market position since acquiring the slot route business of Anchor Coin in February 2003, as well as the company's favorable growth prospects.

The rating confirmation takes into account Herbst's relatively small size, customer concentration and current leverage profile. Debt/EBITDA for fiscal 2003 is expected to be slightly above 4.0 times. Positive ratings consideration is given to the company's high recurring revenue stream from slot operations, stable cash flow performance of its casino properties, and good liquidity profile.

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