Moody's may up Mountain Gods

Moody's Investors Service said it placed the ratings of Inn of the Mountain Gods Resort and Casino on review for possible upgrade following the company's announcement that it has entered into an agreement with the State of New Mexico regarding a long-standing compact dispute.

Placed on review for a possible upgrade were the senior implied rating at Caa1, the $200 million 12% senior unsecured notes due 2010 at Caa1, and the senior unsecured issuer rating at Caa1.

Moody's said that although the compact dispute, a significant factor in the initial rating assignment, has been resolved, an upgrade would also require the company to meet its financial performance objectives. Currently, Inn of the Mountain Gods, which is in the midst of a major expansion, is performing at a weaker-than-expected level.

Despite improved gaming revenues in the third quarter of 2004 (ended Jan. 31), higher-than-anticipated costs and operating inefficiencies had a negative impact on operating cash flow, the agency said.

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