Moody's: Peninsula notes Ba3

Moody's Investors Service said it assigned a Ba3 (LGD2, 29%) rating to Peninsula Gaming, LLC's proposed add-on issuance of $80 million of senior secured notes due 2015.

Peninsula Gaming's B2 corporate family and probability of default ratings, Ba3 (LGD2, 29%) $240 million of senior secured notes due 2015, Caa1 (LGD5, 79%) $305 million of senior unsecured notes due 2017, Caa1 (LGD5, 79%) $50 million add-on of senior unsecured notes due 2017 and stable outlook remain unchanged.

Proceeds from the proposed offering will be used to fund the first phase of a $295 million casino project named Kansas Star in Mulvane, Kan.

The ratings reflect the company's high financial leverage due to weaker than expected operating performance from existing casinos as well as the increased business risks associated with a ground-up casino development, Moody's said.

The ratings also consider the company's expected good liquidity and relative stability of its regional-focused markets throughout the recession, the agency said.

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