Moody’s says credit upgrade possible for company

Monday, April 16, 2001 | 10:57 a.m.

Moody's Investors Services placed Coast Resorts Inc. on review Friday for a possible credit rating upgrade.

Under review are Coast's B3 senior subordinated debt rating, its Ba3 senior secured revolving credit facility rating, its B1 senior implied rating and B2 issuer rating. All these ratings are considered speculative or "junk bond" ratings.

Moody's said its review is being prompted by the continuing success of the Suncoast hotel-casino near Summerlin. Moody's also noted that the company's cash flow margins continued to improve in 2000, rising to 23.4 percent of revenues, up from 21.5 percent in fiscal 1999.

An upgrade, Moody's said, is dependent on "Coast's ability and willingness to maintain debt holder protection measures and cash flow margins over the next two years while undertaking further expansions and remodeling (at the Orleans and Gold Coast)."

Upgraded credit ratings typically make it easier for a company to raise debt, and can allow the company to negotiate more favorable interest rates.