Facebook
Fark
Digg
Reddit
StumbleFontainebleau debt rating downgraded after bankruptcy
Thursday, June 11, 2009 | 1:55 a.m.
Sun Coverage
Investors in the bankrupt Fontainebleau resort's debt may not recover much of their money through the bankruptcy process, debt rating agencies said Wednesday.
In response to the bankruptcy, Moody's Investors Service downgraded Fontainebleau's corporate debt rating to Ca (highly speculative).
And Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings to its lowest level, D.
"The recovery rating on the credit facilities was revised to 6, indicating our expectation of negligible (0 percent to 10 percent) recovery for lenders in the event of a payment default, from 4 (30 percent to 50 percent)," Standard & Poor's said.
"We had contemplated a default occurring in 2010, following the opening of the company's Las Vegas gaming facility. Given the funding requirements remaining to complete the project, which exceed our previous estimates for gross enterprise value of the property, we now expect senior secured creditors to realize 0 percent to 10 percent recovery," Standard & Poor's credit analyst Ben Bubeck said in a statement.
The $2.9 billion resort project on the Las Vegas Strip, 70 percent completed, filed for bankruptcy protection after lenders refused to fund $656 million the company said was needed to complete the project.
But even before banks halted funding, Standard & Poor's had warned in February that the resort would be unable to make its $200 million in annual debt payments because of the weak economy that has harmed the Las Vegas gaming industry and the lack of condominium sales at the resort.
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Photos: Scott Disick celebrates his 29th birthday at 1 OAK in the Mirage
- HOA scandal cuts wide swath across Las Vegas Valley
- Man suffers bullet wound when stopping burglary attempt
- Photos: Surrender’s 2nd anniversary with Skrillex, ‘Le Reve,’ Paris and Floyd
- Nearly 40,000 have voted early in Clark County
Everything Under the Sun
Blogs
The Kats Report
With Shenandoah project stalled, Wayne Newton hits back legally (7 Comments)
Las Vegas Philharmonic says search for new music director to begin 'immediately' (1 Comment)
Where does a Playmate play when she turns 21? Vegas! (3 Comments)
Ice Ice Billy
The road to six-toed cats and Mayor Bubba
The Kats Report
David Itkin tells L.V. Philharmonic officials he's on his way out (14 Comments)
Diamond Dave sells it well as Van Halen pours out the power at MGM Grand (2 Comments)
Entering debut at Tryst, Nick Hissom is a model for a rapid rise to prominence (3 Comments)
- Locally owned and independent since 1950; Winner of the Pulitzer Prize for Public Service, best news website in the nation & DuPont Award for broadcast journalism
The longer this project takes to complete and open, the longer existing employees will get to stay on the job in all the other venues. When City Center opens it's going to devastate many of the existing clubs.
OOOHH, City Center...the most horrific looking set-up I have laid my eys on in quite some time....AWFUL
From the pages of Duh(r) Magazine...
:-)