Casinos Risk Default After Stabilization, Moody's Says
Thursday, July 29, 2010
An economic recovery "may not be enough to stave off looming credit troubles" at many U.S. casino companies, including those that have restructured their debts, Moody's Investors Service said.
A number of casino operators "need overall business conditions to improve, not just stabilize," to generate sufficient cash flows to refinance debt "on less-than-onerous terms," said Keith Foley, a Moody's analyst.
Severe declines are nearing an end, Bloomberg notes in a write up of a recent Moody's report, after a record two-year drop in gambling revenue threatened many casinos with insolvency and bankrupted others, forcing the restructuring of billions in debt. A slow recovery leaves many weakened operators vulnerable to higher interest and tax rates, as well as intensifying competition, according to the ratings company.
To view the entire write-up on Bloomberg, click here.
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