Research Update: Midwest Gaming Borrower LLC Rated 'B+'; Outlook Negative; Proposed Secured Notes Rated 'B+'

Illinois-based Midwest Gaming Borrower LLC (MGB), owner and operator of Rivers Casino Des Plaines (Rivers), plans to issue $750 million of senior secured notes due 2029 and enter into a new $150 million priority revolving credit facility due 2026 to refinance its existing debt, fund the repayment of the mezzanine term loan at the holdco level, and pay transaction fees and expenses. We assigned our 'B+' issuer credit rating to MGB, which reflects Rivers' currently favorable competitive position, aggressive S&P Global Ratings' adjusted leverage in the 4x-5x range over the forecast period, and a high level of existing and future competition. We also assigned our 'B+' issue-level rating and '3' recovery rating to the proposed $750 million senior secured notes,

...- Illinois-based Midwest Gaming Borrower LLC (MGB), owner and operator of Rivers Casino Des Plaines (Rivers), plans to issue $750 million of senior secured notes due 2029 and enter into a new $150 million priority revolving credit facility due 2026 to refinance its existing debt, fund the repayment of the mezzanine term loan at the holdco level, and pay transaction fees and expenses. - We assigned our 'B+' issuer credit rating to MGB, which reflects Rivers' currently favorable competitive position, aggressive S&P Global Ratings' adjusted leverage in the 4x-5x range over the forecast period, and a high level of existing and future competition. - We also assigned our 'B+' issue-level rating and '3' recovery rating to the proposed $750 million senior secured notes, which reflects our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. - The negative outlook reflects our expectation that MGB's adjusted leverage in 2021 will be in the high-4x...

Research Update