Las Vegas Sun NewsFinancial analysts welcome Station Casinos’ proposed debt deal
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10 September 2012
5:50 p.m.
Las Vegas locals gaming operator Station Casinos LLC received a thumbs-up Monday from Wall Street analysts for its latest financing deal.
Station is arranging $775 million in financing to replace existing debt.
In looking at the proposed deal, Moody's Investors Service affirmed Station’s "B3" Corporate Family and Probability of Default ratings and changed the firm’s rating outlook to positive from stable.
That means Moody’s may consider raising the company’s debt rating in the future.
"The outlook revision to positive reflects Moody's expectation that Station's operating margins (profit margin) will increase further, and that the company will apply a substantial portion of its free cash flow towards further debt reduction. Station has reduced its consolidated debt by about $270 million (approximately 12 percent of the company's total consolidated debt) since emerging from bankruptcy in June 2011," Moody’s said in a report on the financing deal.
Moody's also assigned a "B2" rating to the proposed new $775 million credit and loan facility.
Standard & Poor’s similarly assigned a preliminary "B plus" rating to the planned $775 million in financing.
S&P also affirmed its "B" corporate credit rating on the company and said the rating outlook is stable.
S&P noted Station is reducing debt by $150 million thanks to it being reimbursed $194 million it had advanced to tribal casino partner the Graton Tribe in California.
Because of the lower debt totals, S&P on Monday boosted recovery ratings or actual ratings on various classes of Station debt. Recovery ratings predict how much noteholders would recover in a default.
The B-level corporate credit ratings are in the rating agencies’ speculative range, which is common for the gaming industry.
Last month, Station reported a second-quarter profit of $7.5 million and said net revenue was up 4.5 percent from last year’s second quarter to $312.2 million.
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Is this the same agency that approved Stations getting out of bankruptcy by not paying the bond holders and reducing there original debt fr $6B to $2B and having the Fertittas still maintain 40% of the CO? Just asking. What ever happened to the original $6B ?
constantly treating the employees like garbage, not paying squat, and giving the customers pathetic amounts of comps. All the while the executives run their friends and family thru the joints amenities and casino like they are a private company and pay themselves like royalty.
this scam family stiffed the banks for 4 billion, screwed the employees, and were handed the company back by the crooked bankruptcy court to do the whole process over again.
truly a fascist society---the wealthy use the court system and government to screw everyone and are never held accountable themselves.
these properties should have been split up and sold individually to the highest bidder---im sure many suitors would have stepped up given a real chance to buy all those places and they would be run correctly now instead of this bs garbage group. i will not spend $1 in any of those properties. anyone with balls would do the same.
id like to see the comps and payoffs that bankruptcy judge has cashed out!
This is good news for everyone. Stations will pay less interest on its debt. More importantly it shows that Wall Street has confidence in the management of Stations and in Las Vegas in general.