Moody's: Riviera should be able to meet debt service


Moody's Investor Service expects the owner of the Riviera on the Strip to generate enough revenue to meet its debt obligations.

In a report released Wednesday, Moody's issued ratings on $80 million in debt due in 2016 and carried by Riviera Holdings Corp., the hotel's parent company. Riviera Holdings recently emerged from bankruptcy.

"Given rising visitation to Las Vegas, Moody's expects Riviera can grow EBITDA modestly and we expect debt to EBITDA to decline to approximately 8.25 times and 6.75 times by year-end 2011 and 2012, respectively," the report said.

The rating agency expects the hotel to be able to "generate sufficient cash flow to fund interest, working capital, and a modest level of maintenance capital spending."

Riviera Holdings, which also owns a casino in Black Hawk, Colo., has access to a $20 million loan for needed capital spending and maintains a $10 million revolving credit agreement to cover contingencies.

 

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