S&P affirms Trump Casino, revises outlook

Standard & Poor's revised its rating outlook for Trump Casino Holdings LLC to negative from stable and affirmed its B- corporate credit and senior secured debt ratings on the company. The outlook is negative.

The ratings agency said the outlook revision follows the company's announcement of weaker-than-expected operating results for its third quarter ended Sept. 30, due to a combination of increased competitive pressures in Atlantic City that affected Trump Marina and higher gaming taxes and insurance costs at Trump Indiana. As a result, the company's debt leverage has increased.

The ratings for Trump Casino Holdings reflect the competitive market conditions in its markets served, limited expected levels of free cash flow to reinvest in its properties, its relationship to its more highly leveraged affiliate, Trump Atlantic City Associates, and pressured operating results. These factors are somewhat offset by the company's niche positions in each of its markets and adequate, yet modest, expected near term liquidity.

Consolidated EBITDA for the nine months ended Sept. 30, 2003 was $62 million, a decline of more than 15% compared to the prior-year period. Based on current operating trends, total debt to EBITDA is expected to be more than 6x, and EBITDA coverage of cash interest expense less than 2x for 2003.

S&P said that given the company's weaker-than-expected operating results through the first three quarters of 2003, and based on current operating trends, credit measures have significantly deteriorated from levels achieved during 2002. While near-term liquidity at Trump Casino Holdings is adequate, its relationship to liquidity-constrained Trump Atlantic City Associates could result in lower ratings.

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