NEW YORK, NY-- Standard & Poor's Ratings Services has revised its rating outlook on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., to negative from stable.At the same time, we affirmed the 'B+' corporate credit rating on each entity.
"The outlook revision reflects our expectation that operating performance for the remainder of 2008, and likely well into 2009, will remain pressured given weak economic conditions," said Standard & Poor's credit analyst Ben Bubeck.Property-level EBITDA declined 7% in the quarter ended March 31, 2008, versus the same period in 2007.
Recent monthly revenue reported across gaming markets appears to show this trend is continuing and may be accelerating, in some cases, as the year progresses.
We expect rising gasoline prices and increasing unemployment rates to continue to impair consumer discretionary spending in the near term. Therefore, the company's ability to meet our projections for property-level EBITDA in 2008, and potentially 2009, now seems questionable.
Media contacts: Mimi Barker, New York (1) 212-438-5054
Analyst Contacts: Ben Bubeck, CFA, New York (1) 212-438-2176
Melissa Long, New York (1) 212-438-3886
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