Late last year, the company began operating the casino at the Our Lucaya Resort in Freeport with government officials saying that the long awaited opening of the casino would no doubt boost tourism performance on Grand Bahama.
Standard & Poor’s also affirmed its ratings on the company, including its ‘BB-‘ corporate credit rating. Pro forma for the February 2004 bond offering, total debt outstanding at Jan. 25, 2004, was $1.1 billion.
The outlook revision follows Isle’s announcement that the company has been selected by the Illinois Gaming Board as the successful bidder for the 10th Illinois gaming license.
The company bid $518 million for the license. Subject to final approval by the Illinois Gaming Board and Bankruptcy Court approval, Isle intends to construct a $150 million casino in Rosemont, which will include 40,000 square feet of gaming space and 1,200 gaming positions, with expected completion to occur eight months after construction commences.
Given initial capital spending plans, increased debt associated with the Illinois project, and pro forma for Standard & Poor’s estimate of cash flow for the Rosemont property’s first full year of operation, debt to EBITDA, adjusted for operating leases, will be between 5.0x and 5.5x by the company’s fiscal year end in April 2005. The company has not yet disclosed its plans for financing the cost of the license and the new casino.
“The ratings reflect Isle’s aggressive growth strategy, the second-tier market position of many of its properties, and increased expansion capital spending,” said Standard & Poor’s credit analyst Peggy Hwan. “These factors are offset by the company’s diverse portfolio of casino assets, relatively steady historical operating performance, and credit measures that have historically been maintained in line with the rating.”
Biloxi, Miss.-headquartered Isle is a multi-jurisdictional gaming company with most of its properties located in Mississippi, Louisiana, Iowa, and Missouri. In addition, the company operates casinos in Black Hawk and Cripple Creek, Colo., the U.K., and a racetrack in Pompano Beach, Fla.
The Bahama Journal
