Friday, December 26, 2008

Under Ilitch ownership, MotorCity Casino's credit ratings continue to drop

Standard & Poor’s corporate credit ratings for MotorCity Casino (CCM Merger, Inc.) have continued a negative slide since Marian Ilitch took control of the Detroit gambling hall from Mandalay Resort Group/MGM Mirage in April 2005. This despite Ilitch’s $300 million remodel and expansion of the property which added square feet to the gaming floor and a 400-room, 17-story hotel with amenities; and the relative success of the MGM Grand Detroit Casino.

While MotorCity Casino was controlled and managed by Mandalay Resort Group its corporate credit rating was “B+.” A year after Marian Ilitch (CCM Merger, Inc.) took over complete ownership and management of MotorCity Casino, analysts at Standard & Poor’s dropped the credit rating to “B” and at times assigned a negative outlook.

Analysts had originally been told to anticipate some consistent upswing in revenues and a corresponding decrease in debt ratios with the larger gaming floor and the hotel addition; but instead, MotorCity Casino has failed to produce a greater revenue stream and its debt ratios are questionable.

In September, Standard & Poor’s assigned a negative outlook to MotorCity Casino (CCM Merger, Inc.). And then earlier this month, Standard & Poor’s again dropped MotorCity Casino’s credit rating to a "B-" and assigned a negative ratings outlook. Among other concerns, Standard & Poor’s has discovered declining cash flow at MotorCity Casino.

Standard & Poor’s defines these ratings as having significant speculative risk but suggests an entity with a “B” rating generally has the capacity to meet its financial commitments. But with a "B-" rating and a negative outlook assigned, Standard & Poor’s suggests any further adverse business, financial or economic conditions will likely impair MotorCity Casino’s capacity or willingness to meet its financial commitment.

According to the Securities & Exchange Commission (SEC), of those entities Standard & Poor’s assigns a “B” rating, 35.76% experience default; and of those with a rating of “CCC,” the next ratings step down from “B” ratings, 54.38% experience default.

In acquiring MotorCity Casino and completing its expansion and remodel, Marian Ilitch (CCM Merger, Inc.) has reportedly amassed approximately $1 billion of debt.

1 comment:

Improvedliving said...

I dont know what to expect from these folks.

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certainly must reads!

Ilitch has backed loosing sports teams and pizza, but casinos in Detroit? 10.09.06 ● Marian Ilitch #1 on "25 Most Powerful People" to Watch 2006” global gaming business o1.oo.o5 ● My Kingdom for a Casino Forbes 05.08.06 ● Big Lagoon’s casino dream awakens north coast journal 07.28.05 ● Shinnecocks launch legal claim to Hamptons land 06.16.05 ● Ilitch Plans to Expand Casino Empire 07.05.05 ● Ilitch outbids partners 04.14.05 ● Ilitch enmeshed in NY casino dispute 03.20.05 ● Marian Ilitch, high roller 03.20.05 ● MGM Mirage to Decide on Offer for Casino in Detroit 04.16.05 ● Secret deal for MotorCity alleged 02.15.05 ● Los Coyotes get new developer 02.08.05 Detroit casino figure to finance Barstow project 07.07.03 ● Indian Band trying to put casino in Barstow 06.04.03 Pizza matriarch takes on casino roles 10.23.02 ● Vanderbilt gets short straw in negotiations for a casino Lansing Journal 10.06.02 ● Indians aim to drive family from tribe in vicious dispute san diego union tribune 04.09.00 ●Malik owns 2000 Michigan Quarter Horse of the Year 01.01.00 ● Detroit Team to run Michigan’s newest Indian casino 05.23.99 Tiger ties tangle Marian Ilitch 04.29.99 ● Three investors must sell their Detroit casino interests 04.25.99 ● Partners’ cash revived election; They say money was crucial to Prop-E 04.25.99 Investors have troubled histories las vegas review journal 04.27.99 ● Investor served probation for domestic assault on 12 year old boy 04.25.99 Can a pair win a jackpot?: local men hope to... 03.17.97

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