Moody's: Riviera outlook negative

Moody's Investor's Service said it revised Riviera Holding Corp.'s outlook to negative from stable and affirmed its corporate family and probability-of-default ratings at B2 and its $225 million term loan and $20 million revolving credit at B2. The loss-given-default assessment assigned to the loans was changed to LGD4 (51%) from LGD3 (49%).

The outlook revision reflects larger-than-expected declines in gaming revenues in the Las Vegas market and challenging operating conditions in Colorado as a result of the smoking ban imposed early this year, the agency said. As a result, Moody's expects the company's revenues and earnings will drop, causing the 5.5 times debt-to-EBITDA ratio to deteriorate.

The affirmation reflects the company's good locations and operations in - what should be over the long term -- fundamentally good gaming markets, the location of the company's largest property in the favorable regulatory jurisdiction of Nevada and its attractive location on the Las Vegas Strip, Moody's said.

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