S&P lowers Boyd Gaming

Standard & Poor's said it lowered its senior secured debt rating on Boyd Gaming Corp. to BB from BB+ and concurrently affirmed the BB- senior unsecured debt rating on Boyd. Both ratings were removed from CreditWatch where they were placed on Feb. 10.

At the same time, a BB rating was assigned to Boyd's proposed $1.5 billion senior secured credit facility along with a recovery rating of 2.

Proceeds from the proposed facility will be used to refinance existing debt and fund a portion of the pending acquisition of Coast Casinos Inc., and for fees and expenses.

The outlook is stable.

S&P said the ratings on Boyd reflect the company's relatively aggressive growth strategy, a lack of overall brand identity, increased near-term capital spending, and pro forma credit measures that provide little room for weakening within the current rating and outlook.

Offsetting these factors are a diversified portfolio of gaming properties that will be enhanced with the Coast and Shreveport asset acquisitions, the company's experienced management team, its historical and expected ability to generate relatively steady cash flow, and S&P's expectation that debt leverage will be reduced from current levels beyond 2005.

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