French Lick Resorts & Casino Senior Notes Rating Cut To 'D'

(Photo above shows the historic, 443-room French Lick Springs Hotel, opened in 1845 with an additional wing built in 1901. Franklin Delano Roosevelt declared his candidacy for president at this hotel in 1931.)

NEW YORK, NY--Standard & Poor's Ratings Services has lowered its corporate credit rating on French Lick Resorts & Casino LLC (FLRC) to 'SD' (selective default) from 'CCC'.

At the same time, Standard & Poor's lowered its issue-level rating on FLRC's senior notes to 'D' from 'CCC'.

The ratings downgrade follows the successful tender for $127.9 million of principal amount, or 47% of FLRC's $270 million mortgage notes outstanding. The notes were purchased at a discount to par of $780 per $1,000 principal amount, plus a tender premium of $20.

While a payment default did not occur relative to the legal provisions of the notes, Standard & Poor's considers a default to have occurred when a payment related to an obligation is not made in accordance with the original terms (even with investor agreement) and the nonpayment is a function of the borrower being under financial distress.

Standard & Poor's will assess the company's new capital structure, and expects to revise ratings to levels that are reflective of it within the next few weeks (likely around the time that the company files its first-quarter earnings statements)

"Our review will consider management's operating strategies and expected operating performance, and the potential for additional support from the owner," noted Standard & Poor's credit analyst Ariel Silverberg.

Media Contact:

Mimi Barker, New York (1) 212-438-5054, mimi_barker@standardandpoors.com

Analyst Contacts:
Ariel Silverberg, New York (1) 212-438-1807
Michael Listner, New York (1) 212-438-2788