MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it
placed Speedway Motorsports Inc.'s 'BB+' corporate credit rating on negative
watch, citing the company's more aggressive stance on financial policy and debt
leverage, and narrowing margin of covenant compliance for the current rating.
The proposed acquisition of Kentucky Speedway LLC would push the company's
total debt to EBITDA greater than the agency's original target of 3 times for
the current rating, S&P said.
S&P believes that the probability of a Sprint Cup date at Kentucky Speedway
in the 2009 season is relatively low, debt leverage is unlikely to decrease
meaningfully over the near term.
NASCAR had indicated that the schedule for the 2009 season will likely need
to be set by late summer or early fall, and the acquisition is expected to close
in the third or fourth quarter.
Furthermore, the acquisition would meaningfully narrow the margin of bank
covenant compliance, hampering Speedway Motorsports' access to its revolving
credit facility, the ratings agency added.
TFN.newsdesk@thomson.com
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