Moody's cuts Peninsula, rates add-on Caa1

Moody's Investors Service said it downgraded Peninsula Gaming, LLC's corporate family rating and probability of default rating to B2 from B1, its existing $240 million senior secured notes due 2015 to Ba3 (LGD 2, 2%) from Ba2 (LGD 2, 26%) and its existing $305 million senior unsecured notes due 2017 to Caa1 (LGD 5, 79%) from B3 (LGD 5, 78%).

The outlook is stable.

The downgrades conclude a review for possible downgrade that began in December.

Moody's also said it assigned a Caa1 (LGD 5, 79%) rating to the proposed add-on issuance of $50 million senior unsecured notes due 2017.

The proceeds will be used to fund the first phase of a $295 million casino project near Wichita, Kan.

The downgrade reflects the company's high financial leverage due to weaker than expected operating performance from existing casinos, particularly the two properties located in Louisiana, Moody's said.

The downgrade also considers the increased business risks associated with a ground-up casino development, the agency said.

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