S&P affirms Inn of the Mountain Gods

Standard & Poor's said it affirmed Inn of the Mountain Gods Resort and & Casino's B corporate credit and senior unsecured debt ratings and removed the ratings from CreditWatch negative, where they were placed on Oct. 5. The outlook is negative.

S&P said the CreditWatch resolution and affirmation follow the recent release of financial information for the third quarter ended Jan. 31, which reported year-over-year increases in revenue and EBITDA by 19% and 42%, respectively, because of the company's expansion project and better expense management.

Although results seem to have stabilized after two prior quarters of year-over-year EBITDA declines, the outlook remains negative based on leverage that remains weak for the rating and a liquidity position that remains tight, owing in part to the absence of a revolving credit facility. EBITDA coverage of interest expense at Jan. 31 was 1x and debt to EBITDA was 8.4x.

The ratings are constrained by Inn of the Mountain God's narrow business focus and challenges associated with operating a larger resort facility now that its expansion is complete.

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