TEXT-S&P cuts Penn National Gaming notes rating to 'BB-'

Wed Dec 19, 2012 5:13pm EST

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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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