A credit rating agency is gambling that The Rivers Casino's financial health will remain stable over the next 18 months, although warning that the casino still faces long-term hurdles.
Moody's Investors Service on Friday slightly bumped up the North Shore casino's credit rating, making it cheaper for Rivers to borrow money.
A Rivers spokesman said the move will have no impact on casino operations.
The introduction of table games last summer helped drive up Rivers' earnings by about 50 percent within the past year despite the weak economy, Moody's said.
"While we anticipate growth in table games to level off following the conclusion of the initial ramp-up period, we don't expect significant deterioration in (Rivers') operating performance given the company's established market position," Moody's wrote in a news release.
Rivers is slightly less likely to default on $303.5 million in debt, Moody's said. The casino, therefore, should make more than enough money to cover its debts over the next 12 or 18 months, the agency added.
Moody's warned that the casino still pays high interest on its debt. The rate was not available yesterday.
"Based on our current estimates, (Rivers) will likely need to further restructure its debt ... in order to make its capital structure more sustainable," Moody's wrote.
The slight uptick in the credit rating marked a reversal of fortune for Rivers. After a slower-than-expected start for the 2-year-old casino, Moody's and Standard & Poor's downgraded the casino's rating, concerned that Rivers would not be able to cover its debts.
Last month, S&P said it was considering raising Rivers' credit rating, but only slightly, "given uncertainties that remain about the company's longer-term plan to address its burgeoning (high-risk) debt."
The agency said it would make a final decision on the casino's rating within the next few weeks.
