LAS VEGAS - According to a press release sent yesterday Gambling Forum - GamblingMasters.com' offices, Standard and Poor's Ratings Services recently raised its bond ratings, including corporate credit rating, on American Casino & Entertainment Properties (ACEP) to "B+" from "B." The outlook was listed as stable based on the performance of the three ACEP properties: Stratosphere Casino Hotel and Tower, Arizona Charlie's Decatur and Arizona Charlie's Boulder, announced American Casino & Entertainment Properties officials.
"The ratings upgrade by Standard and Poor's is more that just a reflection of the performance of the Las Vegas gaming market," said Richard P. Brown, president and chief executive officer for American Casino & Entertainment Properties. "It reinforces our execution of sound operating strategies which
included astute capital deployment, aggressive marketing and continued expense management," he added.
The Standard & Poor's upgrade was a reflection of ACEP's continued solid operating performance and modest debt leverage. Capital investment, conversion to ticket-in-ticket-out (TITO) slot technology and a property repositioning helped drive revenue and earnings growth at the tratosphere.
Aggressive marketing, locals gaming market growth and TITO technology benefited Arizona Charlie's Decatur. Enhanced marketing programs combined with reduced operating expenses and TITO technology have resulted in increasingly positive EBITDA at Arizona Charlie's Boulder.
For the fiscal year ending December 31, 2004 ACEP's consolidated net revenues increased 14% and consolidated EBITDA was $72.4 million, a 64% year over year increase. The EBITDA margin was 24.1%, up 39.3% from the prior-year
period. Total debt to EBITDA was 3.0x at December 31, 2004. Discretionary cash flow for the 12 months ended December 31, 2004 was nearly $41 million after $14 million in capital expenditures. Discretionary cash flow for the
prior-year period was $17 million. As of December 21, 2004, ACEP had full availability under its $20 million revolving credit facility.
Standard & Poor's outlook for ACEP was stable with the expectation that ACEP's current assets will continue to generate a stable source of cash flow while company capitalization should provide a cushion against a market
downturn or increased capital expenditures.
American Casino & Entertainment Properties was formed as the parent company for financier Carl C. Icahn's three Las Vegas gaming resort properties: Stratosphere Casino Hotel and Tower, Arizona Charlie's Decatur and Arizona Charlie's Boulder. ACEP is a wholly owned, unrestricted subsidiary of
American Real Estate Partners L.P. (AREP), a publicly traded entity that acquires and manages holdings in real estate, gaming and entertainment, and oil and gas. Icahn is the controlling owner of AREP.
SOURCE American Casino & Entertainment Properties