Moody's cuts Sugarhouse HSP

Moody's Investors Service said it downgraded Sugarhouse HSP Gaming Prop. Mezz, LP's corporate family rating to B3 from B2. The agency also downgraded the senior secured priority bank facility to Ba3 from Ba2 and the senior secured bond rating to Caa1 from B3. The outlook is negative.

The downgrade to B3 is in response to the disruption in casino visitation resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. These efforts include mandates to close casinos on a temporary basis.

Sugarhouse closed Rivers Casino Philadelphia effective Sunday, March 15, for fourteen days. Sugarhouse is entirely dependent upon the casino to generate all its revenue and cash flow.

The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos, including Rivers Casino Philadelphia, once this crisis subsides.

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