Fitch's Liquidity Focus

U.S. Gaming, Lodging & Leisure Sector

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. October 14, 2008

OCTOBER 8, 2007. Fitch Ratings believes the U.S. gaming, lodging and leisure industries are positioned to withstand ongoing liquidity pressures in the credit markets, at least in the near-term.

Among nine rated issuers in this review, Fitch calculates approximately $18.5 billion of available liquidity against $9.1 billion of debt maturing through the end of 2009. In general, companies have adequate availability on credit revolvers, many of which were renegotiated prior to the ongoing deteriorations in the credit markets that began in 2H of this year. Most facility expirations occur in 2011 and beyond.

A key concern with respect to liquidity pressure is that many capital projects can be large scale, causing free cash flow in the sector to fluctuate meaningfully based on the timing of development pipelines. The pipeline for new projects, particularly in the gaming industry, is robust. Deteriorating credit market conditions have already caused delays and/or alterations in planned construction, both in the U.S. and Asia.

'There are strategic considerations that can outweigh maintaining a strong liquidity position,' said Michael Paladino, Director, Fitch Ratings. 'Decisions on future development plans could considerably alter an issuer's liquidity position.'

Fitch notes that due to the sector's heavy capital expenditures, solid liquidity and access to capital is a key credit consideration.

This report is part of a larger global liquidity review initiated by Fitch in May 2007 of its rated issuers across corporate finance as a number of liquidity-based sensitivities in the market continue to influence both issuer and investor decisions. The review's goal is to gain a better perspective on the magnitude of maturities that would be coming due over the next 24 months per each North American corporate sector, and what organic and contingent sources were available to meet these obligations during this period of the credit cycle.

The full report 'Liquidity Focus: Gaming, Lodging and Leisure' can be found on the Fitch Ratings' web site www.fitchratings.com. The full report provides specific liquidity information and analysis for each issuer in Fitch's review.