Is there such a thing as too much Stutz? We think not. The Las Vegas Review-Journal’s intrepid Mr. Stutz reports on more financial trouble for Caesars, as ratings agency Fitch has downgraded the stock from stable to negative:
“The outlook revision reflects Fitch’s heightened concern regarding (Caesars) near-to-medium term cash burn rate and potential covenant compliance pressure,” Fitch analyst Michael Paladino wrote in a report to investors. “These factors, combined with previously expressed concerns about weakening relative asset quality due to constrained capital reinvestment, more than offset the positive credit impact from recent transactions executed to push out its debt maturities meaningfully.”
That’s a little technical - bear with me for a minute. It goes on:
“Paladino said there was ‘an increasing possibility’ that Caesars, which operates 10 Strip casinos and more than 50 casinos nationally, ‘could look to execute transactions that Fitch views as a default.’”
See that bit about “views as default”? As anyone who’s ever run into credit card, car loan or mortgage trouble knows, “default” means fail to pay the debts - which is the beginnings of bankruptcy, and for a corporation it means big, big trouble.
This Paladino fellow from Fitch sees an increasing possibility of a default in Caesars’ future.
I’m seeing an increasing possibility of Caesars’ coming to East Boston being a really bad idea. How about you?
If Caesars defaults on a debt, files for bankruptcy, or collapses BEFORE they come to East Boston, that’s bad. If it happens after they’ve come here and built their Suffolk Downs project, that’s going to be a disaster for us.