Moody's ups Yonkers; notes B1

Moody's Investors Service said it upgraded Yonkers Racing Corp.'s corporate family rating and probability of default rating to B1 from B2 and assigned a B1 (LGD 4, 51%) rating to the company's proposed $100 million senior secured second-lien note add-on.

The company's B1 rating on its existing $203 million of senior secured second-lien notes was affirmed. This rating action concludes the review process that was initiated on April 21.

The outlook is stable.

Proceeds from the proposed add-on will be used to refinance Yonkers' $86 million of 13¼% senior subordinated notes due 2013 and related warrants.

The upgrade follows the company's announcement that it had received consent from its senior secured second-lien noteholders to issue an additional $100 million of senior secured second-lien notes and that it launched the $100 million add-on to the notes, the agency said.

The ratings consider that the repayment of the company's 13¼% notes will extend the company's debt maturity profile and lower its cost of capital as well as the view that the proposed transaction will close as currently planned, the agency said.

The ratings consider the inherent risks associated with company's small, single asset profile.

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