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Rating Action:

Moody's upgrades Seminole gaming bonds and bank debt to Baa2

Global Credit Research - 15 Jun 2017

New York, June 15, 2017 -- Moody's Investors Service today upgraded Seminole Tribe of Florida's (Tribe) existing term debt and bonds to Baa2 from Baa3, and its Special Obligation Bonds to Baa3 from Ba1.

At the same time, Moody's assigned a Baa2 rating to the Tribe's proposed $2.4 billion credit facility. The proposed facility consists of a $500 million revolver due 2022, $200 million funded term loan A due 2022, $500 million delay draw term A due 2022, and $1.2 billion term loan B due 2024. Proceeds from the proposed facility will be used to primarily to repay the Tribe's outstanding term loans and fund expansions at its Tampa and Hollywood Florida casinos.

"The one-notch upgrade of the Tribe's ratings reflect Moody's expectation of continued exceptionally strong credit metrics along with further and substantial investment in the Tribe's two largest casinos that will help the Tribe maintain its dominant market position over the long-term," stated Keith Foley, a Senior Vice President at Moody's. "Even with the significant planned capital investment, the Tribe will be able to maintain very low leverage, at less than 2.0 times," added Foley.

The upgrade also considers Moody's favorable view of the Tribe's decision to continue to make revenue payments to the State of Florida despite a ruling in the Tribe's favor that entitles the Tribe under the existing compact, which expires in 2030, to withhold revenue share payments. The ruling is related to the State's decision to allow others (other than another Indian tribe) to conduct banked card games. As a result of that lack of exclusivity, the Tribe is entitled under the existing compact to conduct banked card games at all of its 7 casinos through 2030 without having to share revenue with the State. Despite the ruling, the Tribe continues to make revenue payments to the State and has not offered banked card games beyond the original 5 facilities allowed by the compact.

Ratings upgraded:

$175 million Series 2005B bonds due 2020, to Baa2 from Baa3

$257 million term loan B2 due 2017, to Baa2 from Baa3

$540 million term loan B due 2020, to Baa2 from Baa3

$345 million Series 2007 Special Obligation Bonds, to Baa3 from Ba1

$51 million Series 2008A Special Obligation Bonds, to Baa3 from Ba1

New ratings assigned:

$500 million revolver due 2022 -- Baa2

$200 million funded term loan A due 2022 -- Baa2

$500 million delay draw term A due 2022 -- Baa2

$1.2 billion term loan B due 2024 -- Baa2

The Baa2 rating on the Tribe's existing $257 million term loan B due 2017 and $540 million term loan B due 2020 will be withdrawn once the proposed credit facility becomes effective and the term loans fully repaid.

RATINGS RATIONALE

The Tribe's Baa2 rating reflects its dominant market position in the Florida gaming market and the company's strong financial profile. Moody's expects that the Tribe's debt/EBITDA, including its gaming division debt and its special obligation bonds will remain at or below only 2.0 times. Key concerns include the Tribe's gaming concentration in one state and significant dividend obligation.

The Tribe's stable rating outlook anticipates that the favorable gaming demand characteristics in Florida will continue and that no meaningful direct competition will appear in the foreseeable future. The stable rating outlook also incorporates Moody's view that the Tribe and State of Florida will continue to work towards renegotiating its compact without having a negative impact on the Tribe's operating ability, competitive position, or financial profile.

Further rating improvement is limited by the Tribe's high level of geographic concentration and significant dividend payments. Ratings could be downgraded if debt/EBITDA rises above 2.5 times for any reason and/or the Tribe's dominant market position becomes challenged in a meaningful way.

The Seminole Tribe of Florida is a federally recognized Indian tribe that owns and operates six gaming and resort facilities throughout southern and central Florida. The Tribe also owns Seminole Hard Rock Entertainment, Inc. (B1 stable). Seminole Hard Rock owns and operates Hard Rock cafes located throughout North America, Europe, Asia, Australia and the Caribbean. The Tribe does not publicly disclose financial information.

The principal methodology used in these ratings was Global Gaming Industry published in June 2014. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Keith Foley
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Janice Hofferber, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
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