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S&P raises outlook on Coast after IPO announcement

Wednesday, June 5, 2002 | 11:10 a.m.

The debt-rating agency Standard & Poor's has revised its outlook for Coast Hotels & Casinos Inc. of Las Vegas to positive from stable following Coast's filing last week for a public stock offering.

S&P has a BB- corporate bond rating for the company. Low debt ratings can hamper companies' ability to raise capital to fund future projects.

"The ratings for Coast Hotels reflect its good operating and development track record, its growing cash flow base and its solid market position in the Las Vegas 'locals' market," S&P analyst Craig Parmelee said. These factors are offset by the company's relatively small cash flow base and ongoing "aggressive" capital spending program, he said.

The ratings could be raised over the immediate term if current investments generate adequate returns, and once the scope and timing of future projects can be more fully assessed, S&P said.

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