Gaming briefs for Jan. 14, 2004
Wednesday, Jan. 14, 2004 | 11:16 a.m.
Firm gets B2 rating
Moody's Investors Service has assigned a B2 rating to $200 million senior secured notes jointly proposed by American Casino & Entertainment Properties LLC and its subsidiary American Casino & Entertainment Properties Finance Corp.
The notes are due 2012 and the outlook is stable, Moody's said. The ratings agency also assigned a B2 senior implied rating and a Caa1 senior unsecured issuer rating.
American Casino is a subsidiary of American Real Estate Partners LP, a real estate partnership controlled by investor Carl Icahn. This month American Real Estate announced a $125.9 million deal to buy the Arizona Charlie's Decatur and Arizona Charlie's Boulder hotel-casinos in Las Vegas from Icahn.
The ratings consider American Casino's "dependence on a single market" and its lack of diversification, Moody's said.
The Stratosphere hotel-casino in Las Vegas accounts for about 65 percent of total property cash flow. Arizona Charlie's Decatur has contributed positive cash flow but Arizona Charlie's Boulder has not generated a profit since it was acquired by Icahn in 2000, Moody's said.
Slot maker to sell slot assets to competitor
Shuffle Master Inc. of Las Vegas has agreed to sell certain slot machine assets to competitor International Game Technology of Reno.
The assets include Shuffle Master's share of its strategic alliance slot operations with Reno-based IGT, related inventory and certain intellectual property including slot patents and licenses. Shuffle Master also will terminate its efforts to develop retrofit games on IGT's "S+" game platform. Terms of the deal weren't disclosed.
Shuffle Master announced plans last month to sell its slot division to focus on its core card shuffler machine business and related units that make table games and electronic versions of those games.
"This transaction represents our first tangible step in refocusing our strategy," Shuffle Master Chief Executive Mark Yoseloff said. "As we have stated in the past, we expect to sell our slot assets at a profit over the next several months."
Ratings agency downgrades outlook on Golden Nugget debt
Debt rating agency Moody's Investors Service has downgraded the ratings outlook to "negative" from "stable" on debt issued by Poster Financial Group Inc., a start-up company that is purchasing the Golden Nugget hotel-casino for $215 million.
The downgrade was made in response to this month's decision by the Gaming Control Board to issue a one-year license to Poster Financial rather than a permanent license. Regulators based the decision on a friendship between Poster owners Tim Poster and Tom Breitling and Rick Rizzolo, owner of the topless club Crazy Horse Too in Las Vegas. The Nevada Gaming Commission will take the Control Board's recommendation into consideration when it meets this month.
The downgrade was not based on the company's current or expected operating performance. Moody's has assigned a B2 rating to Poster's proposed $155 million senior secured notes due 2011, which will help fund the transaction.
Slot maker files suit against competitor
WMS Gaming Inc. has filed a patent lawsuit against competitor Sigma Game Inc. in U.S. District Court in Las Vegas.
The suit alleges that Sigma infringed on a "Bonus Patent" held by WMS. WMS is asking the court to grant an injunction barring the Las Vegas company from making and selling games that use the patent and to enter an order finding that Sigma willfully infringed on the patent. WMS also is asking for unspecified monetary damages.
Sigma Game declined comment on the allegations.
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