S&P rates Tunica-Biloxi Gaming notes B+

Standard & Poor's said it assigned a B+ issuer credit rating to the Tunica-Biloxi Gaming Authority and a B+ rating to its proposed $150 million senior notes due 2015.

The outlook is stable.

Proceeds from the proposed note issue will be used to refinance existing debt, to pre-fund expansion capital spending and for fees and expenses.

The ratings on the Authority reflect its dependence upon a single casino - the Paragon Casino Resort, competitive market conditions, uncertainty surrounding the depth of the market in which Paragon operates, construction and disruption risks associated with its planned expansion project and unstable operating results over the past several years, the agency said.

Still, S&P said Paragon benefits from limited direct competition, potential exists for EBITDA growth post-expansion and pro forma credit measures provide cushion within the rating against larger-than-expected construction disruption and competitive pressures.

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