Wednesday, April 9, 2003 | 9:56 a.m.
Standard & Poor's has assigned a BBB-rating to Park Place Entertainment Corp's proposed $300 million issuance of senior notes due 2013. Proceeds will be used to repay outstanding debt.
S&P also affirmed its BBB-corporate credit rating on Park Place and said its outlook on the company remains negative.
Park Place remains highly leveraged for the current rating despite its progress in reducing debt last year, S&P analyst Michael Scerbo said.
"Standard & Poor's recognizes the capital intensity inherent in the gaming sector, however, Park Place's announcement of potential new hotel towers in Las Vegas and Atlantic City was outside of Standard & Poor's previous expectations."
If new spending initiatives yield weaker-than-expected operating results stemming from a challenging business climate this year, the company's ability to improve its credit rating could be threatened, Scerbo said. Unexpected growth projects could also hurt ratings, he said.
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