Despite the difficult nationwide economic times that we have all been through, Downstream Casino and Resort got some good news from Moody’s Investment Services.
Despite the difficult nationwide economic times that we have all been through, Downstream Casino and Resort got some good news from Moody’s Investment Services. They issued a report the previous week that shows that they upgraded Downstream’s financial rating from negative right on up to stable. They then cited, “the relatively stable trend of Authority’s operating performance as reflected in its win per unit per day and guest count since its opening in late 2008, despite a challenging economic environment.” The report also went on to indicate that the United States gaming industry outlook remains in the negative base because of a concern for the discretionary gaming spending and additional competition.
Moody’s also said that because there is no competition, comparable gaming facilities that exists within a two hour car ride of the Downstream Casino Resort in Missouri, Oklahoma, Arkansas, Kansas, the casino continues to thrive. “In addition, although the net revenues were lower than previously anticipated, company successfully implemented expense management initiatives and introduced a different product mix that helped it deliver earnings before interest, taxes, depreciation and amortization [EBITDA] margins around 40 percent for fiscal year 2009,” the report said. The Downstream Development Authority Chairman John Berrey stated that they were very much honored by this upgrade in standing from Moody’s. This is something that they have long waited for since they have paid off their debts and got their entire financial situation under control.
“We have weathered the storm thanks to a smart and conservative development approach, a savvy and highly capable management team, hard-working staff, and the steady and much appreciated community support of our region,” Berrey said. Even with the good news at hand, Moody’s was reluctant to say that the upside of this is going to be long term. The report also stated that because of the Development Authority’s size and their lack of geographical diversification, “Moreover, the Authority’s operating metrics and debt protection measures are still weak and well below management’s original expectations,” the report said. “The leverage and interest coverage ratios as adjusted by Moody’s for fiscal year-ended September 30, 2009 were at about 6.2 times and 1.2 times respectively.” Regardless of the question in long term standing, Berrey was very quick to relish the short term upgrade in their financial rating. “This bodes well not only for the Quapaw Tribe and the 1,100 Downstream team members, but for the economic well being of the whole four-state region that we call home,” Berrey said.