Moody's lowers French Lick

Moody's Investors Service said it lowered French Lick Resorts and Casino, LLC's probability of default rating to Ca/LD from Caa3.

The corporate family rating and the rating on the first-mortgage notes were also downgraded to Ca from Caa3, the agency said.

The outlook is negative.

In Moody's opinion, these actions reflect the completion of a transaction that has the characteristics of a distressed exchange and the likelihood of other distressed exchanges in the future, considering French Lick's very weak financial condition and full reliance on the parent's support.

On April 3, Blue Sky Resorts LLC, French Lick's direct parent, announced the purchase of $31.7 million in aggregate principal amount or about 22% of French Lick's $142 million first-mortgage notes at a discount to the par value, the agency said.

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