Moody’s drops Tunica-Biloxi, notes

Moody's Investors Service said it downgraded Tunica-Biloxi Gaming Authority's corporate family rating to Caa3 from Caa2, probability of default rating to Caa3-PD from Caa2-PD and its senior unsecured note rating to Caa3 from Caa2.

The outlook is negative.

Moody’s said the downgrade reflects the double digit declines in the authority’s EBITDA that increases the likelihood that Tunica-Biloxi will have difficulty refinancing its $150 million senior notes when they come due in November 2015. The EBITDA declines in each of the last six quarters have been caused by increased competition in its primary market area in central Louisiana.

In addition to Moody's concerns about the sustainability of Tunica-Biloxi’s capital structure, the Caa3 corporate family rating reflects its high leverage – debt/EBITDA was 6.8 times for the trailing 12 months ended June 29 (or above 10 times debt/EBITDA less tribal distributions) – and weak interest coverage of EBITDA less capex/interest of about 1.1 times.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.