Investors bought into gaming companies' paper last week on the expectation that the closure of New Jersey casinos following the state legislature's failure to pass a budget would be resolved. The state legislature came to an agreement on the budget Thursday afternoon, right before press time. Casino paper that investors bought, included: Resorts International Hotel and Casino's term loan "B," which was up an eighth of a point to 101 1/2 and Ameristar Casino's term loan "B," which was up a quarter of a point to 99 1/2. "People see it as a buying opportunity," said a trader.
Standard & Poor's and Moody's Investors Service said the closure of New Jersey casinos would unlikely lead to any immediate rating actions. Casinos with large exposure to the Atlantic City gaming market include Trump Entertainment Resorts and Resorts International. S&P said in a report that these companies are already highly leveraged. Trump Entertainment's 8 1/2% '15 bonds fell to 95 1/2 from 96 1/8 at the beginning of last week, but then increased a quarter of a point to 95 3/4 on Thursday. Resorts International's 11 1/2% '09 notes were down half a point to 107 1/2.
New Jersey casinos were shut down last week after the state legislature failed to adopt a state budget and New Jersey governor Jon Corzine shut down all non-essential state services. The budget impasse was broken July 6.