Moody’s cuts Enterprise Development

Moody’s Investors Service said it downgraded the Enterprise Development Authority’s corporate family and senior secured bond ratings to Caa1 from B3. The ratings are on review for further downgrade.

The downgrade is in response to the disruption in casino visitation resulting from efforts to contain the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel, Moody’ said.

These efforts include temporarily closing the Hard Rock Hotel & Casino Sacramento at Fire Mountain. The authority announced Fire Mountain will remain closed through the end of March because of coronavirus concerns. Fire Mountain is owned by EDA and is its only source of cash flow available to repay is rated debt, the agency said. Fire Mountain originally opened in October.

“The downgrade also reflects EDA’s weak liquidity and the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos and other entertainment facilities, including at Fire Mountain, once this crisis subsides,” Moody’s said in a press release.

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