Moody's rates MCE bonds B1

Moody's Investors Service said it assigned a Ba3 corporate family rating to MCE Finance Ltd. and a provisional B1 rating to its proposed dollar-denominated bond issuance. The Ba3 secured debt rating of Melco Crown Gaming (Macau) Ltd. was affirmed. MCE Finance owns 100% of the economic interests in Melco Crown Gaming.

The outlook is negative.

The bond proceeds will be used to pay down the secured bank loans at Melco Crown Gaming.

The agency said the Ba3 corporate family rating captures the group's exposure to the risk surrounding the rapid evolution of Macau's gaming market and the operating uncertainty associated with the expected ramp-up in the operations of the City of Dreams complex. In addition, Moody's expects the group's financial profile to remain modest for the near term.

The Ba3 corporate family rating is uplifted from the standalone profile of MCE to reflect implied support from Crown Ltd. (Baa2/Stable), although the agency said it expects support from Crown will decline over time as Crown continues to dilute its equity interest in the group and the financial support required by the group falls after City of Dreams has successfully ramped up its operation.

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