Moody's may downgrade Inn of the Mountain Gods

Moody's Investors Service said it kept Inn of the Mountain Gods Resort and Casino's B3 corporate family and senior note ratings on review for possible downgrade.

The agency said that while the company has experienced continued revenue improvement and better expense management and is current on its 10-Q filings, Moody's remains concerned about the Inn of the Mountain Gods' continued tight liquidity.

The agency expects the company will have enough unrestricted cash resources to meet its May 15 interest obligation on its 12% senior notes due 2012, but said that cash flow shortfalls over the next two quarters could make it more difficult for the company to meet its Nov. 15, 2006 interest obligation unless additional liquidity resources are obtained.

Inn of the Mountain God's existing revolver is fully drawn, and although it has a $15 million restricted cash reserve, these funds can only be accessed when the company's expansion project, which opened in March 2005, receives final completion certification. Additionally, there is no assurance that these funds, when ultimately released, will remain at or be available to the casino resort enterprise level, the agency said.

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