S&P rates PITG Gaming loans B, CCC

Standard & Poor's said it assigned a B- corporate credit rating to PITG Gaming HoldCo. The agency assigned a B rating to PITG HoldCo's proposed $10 million revolving credit and $370 million term loan due 2011 with a recovery rating of 2, indicating 70% to 90% recovery.

The agency also rated the proposed $250 million senior secured second-lien term loan due 2011 CCC with a recovery rating of 6, indicating up to 10% recovery.

The outlook is negative.

Proceeds will be used to refinance an existing bridge loan, establish reserve accounts and to fund the construction of the company's casino in Pittsburgh, Pa.

The B- corporate credit rating reflects the significant fixed-charge burden for the property, given the proposed financing structure that includes no cash equity, a limited startup period provided by the interest reserve account and construction and startup risks associated with the planned facility, the agency said.

These factors are somewhat tempered by a sizable population base from which to draw from in the greater Pittsburgh metropolitan area, relatively limited competition and solid slot machine revenue metrics generated by the company's closest competitor, S&P said.

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