TEXT-S&P cuts Penn National Gaming notes rating to 'BB-'
Dec 19 () - Standard & Poor's Ratings Services today revised its recovery rating on Penn National Gaming Inc.'s 8.75% senior subordinated notes due 2019 to '5' (expectation of 10% to 30% recovery) from '4' (30% to 50% recovery) and consequently lowered its issue-level rating on the notes to 'BB-' from 'BB', in accordance with our notching criteria. The issue-level rating was removed from CreditWatch, where it was placed with negative implications on Oct. 17, 2012. The rating revisions reflect the closing on a $1 billion add-on to the existing senior secured credit facilities. This scenario and potential rating outcome were previously discussed in our research report on Penn National Gaming, published Oct. 17, 2012, on RatingsDirect. The $1 billion add-on results in a higher level of secured debt outstanding under our simulated default scenario versus our previous analysis. This reduces the recovery prospects for the subordinated notes enough to warrant a downward revision to our recovery rating on the notes. RELATED CRITERIA AND RESEARCH -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 RATINGS LIST Ratings Unchanged Penn National Gaming Inc. Corporate Credit Rating BB/Stable/-- Ratings Downgraded And Removed From CreditWatch; Recovery Ratings Revised Penn National Gaming Inc. To From 8.75% sr sub notes due 2019 BB- BB/Watch Neg/-- Recovery Rating 5 4 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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