Moody's rates Herbst Gaming loan Ba3

Moody's Investors Service said it assigned a Ba3 rating with a loss-given-default assessment of LGD3 to Herbst Gaming, Inc.'s new $875 million senior secured bank facility, which includes a $175 million revolver, $375 million term loan B and $325 million delay draw term loan B.

The B1 corporate family and probability-of-default ratings and the B3/LGD5 senior subordinated debt rating were affirmed. The outlook is stable.

Proceeds from the new facility will be used to fund the $400 million acquisition of Primm Valley Resorts that is expected to close in the first quarter of 2007 and the $150 million Sands Regent acquisition that is expected to close by the end of 2006.

The agency said Herbst's ratings consider that the company's pro forma debt-to-EBITDA ratio is about 6x and is not expected to improve materially over the next 18 to 24 months.

Longer term, however, ratings improvement is possible given the company's increased asset size and continued low regulatory risk profile, Moody's said.

© 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.