S&P Downgrades Isle of Capri Casinos Inc. to 'B'; Outlook Negative

NEW YORK, NY--Standard & Poor's Ratings Services has lowered its ratings on St. Louis-based Isle of Capri Casinos Inc. (Isle), including its corporate credit rating to 'B' from 'B+'. The outlook is negative.

At the same time, we lowered the issue-level rating on Isle's senior secured credit facilities to 'B+' (one notch higher than the 'B' corporate credit rating on the company), from 'BB'. We revised the recovery rating on these loans to '2' from '1'. The '2' recovery rating indicates that lenders can expect substantial (70%-90%) recovery in the event of a payment default.

In addition, Standard & Poor's lowered its issue-level rating on Isle's 7% senior subordinated notes to 'CCC+' (two notches lower than the 'B' corporate credit rating), from 'B'. The recovery rating of '6' on these securities remains unchanged, indicating that lenders can expect negligible (0%-10%) recovery in the event of a payment default.

"The ratings downgrade reflects the challenging economic conditions affecting the U.S. gaming industry," said Standard & Poor's credit analyst Ariel Silverberg, "and our expectation that credit measures will not improve to a level in line with the previous rating during the next few years."

Media Contact:
Mimi Barker, New York (1) 212.438.5054, mimi_barker@standardandpoors.com

Analyst Contacts:
Ariel Silverberg, New York (1) 212.438.1807
Ben Bubeck, CFA, New York (1) 212.438.2176 (bottom right photo)