Moody's rates Anschutz Southern

Moody's Investors Service said it has assigned a B2 rating to Anschutz Southern California Sports Complex LLC's $125 million senior secured notes due 2014, a B1 senior implied rating, and B3 senior unsecured issuer rating.

The outlook is stable.

The senior secured notes are secured by the assets of the Home Depot Center multi-use sports facility and 90% of the capital stock of the Staples Center and are guaranteed on a senior secured basis by HDC Holdco (the 100% indirect owner of Home Depot Center) and Arena Holdco (the 90% indirect owner of Staples Center).

The company will use the proceeds of the notes to provide for repayment to affiliates of advances made in connection with the construction of Home Depot Center. Total construction costs have amounted to about $150 million.

Moody's said the ratings reflect high financial leverage, the short operating history of the Home Depot Center and Major League Soccer, a restricted payments covenant that permits cash leakage, a depreciating asset base with no appreciating asset offset (i.e. sports teams), and the high probability of a NHL work stoppage.

The ratings also reflect strong asset value and coverage, solid operating performance at the Staples Center with high operating margins and significant contractually obligated income, team and event diversification, strong management and wealthy ownership, and favorable demographics.

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