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Pinnacle bonds rated 'negative' by Moody's

11 February 2010

LAS VEGAS, Nevada -- Pinnacle Entertainment's bonds were given a "negative" rating by Moody's Investors Service, nearly a week after the casino operator reported declining earnings from its Louisiana and Indiana casinos.

Moody's had previously rated Las Vegas-based Pinnacle's bonds as "stable."

In a statement, the ratings service said Pinnacle experienced declining fourth quarter earnings at the L'Auberge du Lac casino in Lake Charles and the Boomtown New Orleans, as well as the Belterra in Indiana.

Pinnacle, which doesn't operate a casino in Las Vegas, said last year that it would scale back a second casino in Lake Charles and make the building an expansion to L'Auberge. Moody's also considered the planned March 3 opening of River City, Pinnacle's third casino in St. Louis.

"Positive rating consideration is given to the company's leading market share position in Lake Charles and expectation that the company's River City casino development in will contribute favorably to earnings and cash flow," Moody's said in a statement.

The service said the company had an "adequate liquidity profile. Pinnacle recently entered a new $375 million revolving credit agreement expiring in 2014 that refinanced a $531 million revolver which had a December expiration date.

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