Moody's Investors Service revised its outlook on Boyd Gaming Corp. to stable from positive following the company's agreement to buy five casino properties for roughly $856 million.
The company's corporate family rating was affirmed at B2.
Moody's said it believes Boyd would no longer be able to achieve and maintain debt/EBITDA at or below the 5.25x target necessary for an upgrade to a higher rating within the requisite time frame.
Boyd is buying four of Pinnacle Entertainment Inc.'s casino resorts for $575 million in connection with Penn National Gaming Inc.'s takeover of Pinnacle. Boyd is also buying the Valley Forge Casino Resort in King of Prussia, Pa., from Valley Forge Convention Center Partners LP for $280.5 million, in an unrelated transaction.
Moody's senior vice president Keith Foley said: "From a strategic point of view, however, there is a credit positive element to these acquisitions in that they are consistent with Boyd's geographic diversification plans, something Moody's believes will be beneficial to the company over the longer-term, both in terms of the company's overall credit profile, competitive position, and possibly ratings at some point in the future."
Fitch Ratings also revised Boyd's rating outlook to stable from positive following the acquisition deals.