Dec 18 - Standard & Poor's Ratings Services today assigned its 'CCC+'
issue-level and '6' recovery rating to the proposed $210 million of unsecured
notes due 2018 to be issued by Landry's Holdings II Inc. We included this debt
under the parent, Houston-based retailer Landry's Inc. The '6' recovery rating
indicates our expectation of negligible (0% to 10%) recovery for noteholders in
the event of a hypothetical payment default. Proceeds are to be used to fund a
distribution to the parent company. All other ratings, including the 'B'
corporate credit rating, are unaffected by this transaction. As a result of the
transaction, we expect adjusted leverage of nearly 5.9x of interest coverage of
The corporate credit rating on Landry's is 'B' and the rating outlook is
stable. The 'B' rating continues to reflect our view of Landry's financial
risk profile as "highly leveraged". In our base-case forecast that
incorporates 2% same-store sales and debt reduction with about half of excess
cash flows, we see leverage declining to the mid-5x area and funds from
operations to debt of 10%, which are in line with levels indicative of the 'B'
rating. (For the latest complete corporate credit rating rationale, see the
summary analysis on Landry's published on Oct. 25, 2012.)
RELATED CRITERIA AND RESEARCH
Criteria Guidelines For Recovery Ratings On Global Industrials Issuers'
Speculative-Grade Debt, Aug. 10, 2009
Corporate Credit Rating B/Stable/--
Landry's Holdings II Inc.
$210 Mil. Unsecured Notes Due 2018 CCC+
Recovery Rating 6
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