Moody's lowers ratings for Riviera Holdings

Moody's Investors Service on Friday revised its rating outlook of hotel and casino operator Riviera Holding Corp. to negative from stable, based on larger-than-expected declines in gaming revenues in the Las Vegas market.

Moody's also said the change was affected by challenging operating conditions in Colorado, because of a smoking ban that went into effect early this year.

Riviera's revenue and earnings are expected to drop, causing deterioration in the ratio of its debt to earnings before interest, taxes, depreciation and amortization, Moody's said.

Moody's affirmed "B2" ratings for the corporate family, profitabilty of default and senior secured ratings.

That affirmation reflects Riviera Holding's locations and operations in what should be good gaming markets in the long term, Moody's said.

The ratings also reflect above average leverage relative to the company's small scale and limited property diversification.