Moody's cuts Riviera Holdings outlook to negative

Moody's Investors Service said it confirmed Riviera Holdings Corp.'s B2 corporate family rating and the B2 rating on its 11% senior secured notes due 2010. This concludes the review for possible downgrade that began on April 6.

The outlook was changed to negative to reflect the agency's concerns regarding Riviera's future strategic direction given recent efforts to sell the company, the potential that gaming revenues may be negatively impacted by lower foot traffic to the Las Vegas hotel and casino given the closure of several properties nearby and a slightly weaker near-term liquidity profile given the expiration date of the company's revolving credit facility in July 2007.

Moody's noted that the company had a cash balance of $22 million as of June 30 and is on track to generate free cash of about $5 million to 6 million in 2006. Additionally, there are no significant debt maturities over the next 12 months.

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