Moody's cuts AGS to Caa1

Moody's Investors Service said it downgraded AGS, LLC's corporate family rating to Caa1 from B3, the probability-of-default rating to Caa2 from Caa1, $20 million 5-year secured and guaranteed revolving credit facility, $30 million 6-year secured and guaranteed delayed draw term loan and $125 million 6-year secured and guaranteed term loan to Caa1 (LGD3, 33%) from B3 (LGD3, 35%).

The outlook is negative.

The downgrade reflects the company's weaker-than expected operating performance, the higher debt-to-EBITDA ratio relative to original expectations and increasing likelihood AGS will breach its debt-to-EBITDA ratio covenant over the next two quarters, according to the agency.

Debt-to-EBITDA ratio is estimated at about 5.5 times by year-end 2008, Moody's said.

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