Moody’s ups Eldorado Resorts debt, rates notes B2

Moody's Investors Service said it affirmed Eldorado Resorts, Inc.'s B1 corporate family rating and SGL-1 speculative grade liquidity rating. The outlook is stable.

At the same time, a B2 rating was assigned to Eldorado's proposed $600 million senior unsecured notes.

Eldorado's existing $1.25 billion senior unsecured notes were upgraded to B2 from B3. The company's secured bank debt was also upgraded to Ba1 from Ba2.

Proceeds from Eldorado's proposed senior unsecured notes, which have terms similar to the company's existing senior unsecured notes, will be used to help fund the company's acquisition of Tropicana Entertainment, Inc. in a cash transaction valued at $1.85 billion.

"The affirmation of Eldorado's B1 corporate family rating reflects Moody's view that the size and diversification benefits that the company will obtain from the acquisition of Tropicana, along with the accretive nature of the transaction from a free cash flow basis, will more than offset that risk associated with the increase in leverage," Keith Foley, senior vice president at Moody's, said in a news release.

"The transaction is also consistent with our understanding of the company's strategy to expand its regional gaming footprint.”

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