Fitch rates Harrah's Operating notes BBB-

Fitch Ratings said it assigned a rating of BBB- to the $750 million in senior unsecured notes offered by Harrah's Operating Co., the principal operating subsidiary of Harrah's Entertainment, Inc.

Proceeds of the notes, which carry a coupon of 6.50% and mature in 2016, will be used to help fund the refinancing of two sets of senior unsecured notes due in 2008 and 2011. The company tendered for the 2009 and 2011 notes on May 30.

The issuer default ratings for Harrah's Entertainment and Harrah's Operating Co. are BBB-. The outlook is stable.

Fitch said the ratings reflect the company's large and diversified portfolio of casinos, significant cash flow generation, nationally recognized brands, good-quality assets, geographic diversity, marketing and technical prowess, and financially conservative management team.

Ongoing risks include the potential for further run-up in leverage due to development opportunities, potential regulatory changes and/or tax increases (particularly in riverboat jurisdictions), and competitive threats in markets such as Atlantic City.

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