Moody’s Investors Service has downgraded MGM Mirage’s corporate family rating from a “Ba3” to “B1,” the credit ratings, research and risk analysis firm announced on Tuesday.
The casino operator, which owns and operates 17 properties, was downgraded due to 2009 earnings expectations falling more than previously expected, Moody’s said.
“Additionally, the company has been unable to raise the targeted $3 billion in capital for its CityCenter development, and so its cash needs have increased,” said Peggy Holloway, senior credit officer at Moody's, in a prepared statement.
“As a result of this lower EBITDA (earnings before interest, taxes, depreciation and amortization) and higher debt levels, we estimate that MGM's debt/EBITDA will exceed eight times by year-end 2009 -- a level inconsistent with its prior rating,” Ms. Holloway added.