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TEXT-S&P: Gaylord Entertainment ratings unaffected by announcement
May 1, 2012 / 8:28 PM / in 6 years

TEXT-S&P: Gaylord Entertainment ratings unaffected by announcement

May 1 - Standard & Poor's Ratings Services said today that its 'B+'
corporate credit rating and stable rating outlook on Nashville-based Gaylord
Entertainment Co. is not currently affected by the company's
announcement that it is exploring ways to unlock shareholder value. The company
did not describe the nature of the potential transaction. 	
Our current base-case expectation is that Gaylord's leverage will improve to 	
the low-5x area and EBITDA coverage of interest expense will improve to around 	
3x in 2012, credit measures that are good for the current rating. By 	
comparison, our credit measure thresholds for Gaylord at the current rating 	
are leverage under 6x and coverage of interest expense above the 2x area. 	
Gaylord's announcement today also included preliminary first-quarter 2012 	
results, and the company expects that total RevPAR grew 4.9% and consolidated 	
cash flow grew 24% during the quarter. This operating performance would 	
represent a higher growth pace than our current full-year forecast for 	
Gaylord, and as a result, the company may build in additional cushion in its 	
credit metrics (compared with our thresholds) in 2012 than under our current 	
base-case operating expectation. Consequently, Gaylord may have some capacity 	
for a moderate level of additional leverage over the next couple of years, but 	
we would need to assess the impact of any potential transaction in light of 	
the company's proposed Aurora, Colo. hotel development plans. 	
Additionally, the bulk of the company's proposed Aurora development spending 	
is expected in 2014 and 2015 (Gaylord expects the resort to open in early 	
2016). We believe the terms of any potential transaction currently under 	
exploration would likely be finalized after the vote to approve the incentives 	
under the State of Colorado's Regional Tourism Act, currently scheduled on May 	
18, 2012. We will continue to monitor developments regarding a potential 	
transaction and its credit impact on Gaylord.

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