DENVER— Vail Resorts and American Skiing Co. had both had their credit ratings downgraded by Moodys Investors Service, thanks to a decline in ski vacations since the Sept. 11 terrorist attacks. Colorado Ski Country USA notes that there has been a 14% decline in skier visits statewide during the first three months of the season. Having a credit rating lowered has the potential to drive up future borrowing costs. MGM Mirage earlier this week had its credit rating lowered. Moodys lowered the junk rating on $200 million of Vail Resorts debt two notches to “B2 from “Ba3, and cut the companys overall debt rating one grade to “Ba3 from “Ba2. Moodys said that it is concerned that Vail Resorts will continue borrowing money to pursue acquisitions in a bid to diversify its earnings base. Moodys rating outlook on the company, which made some major real-estate purchases late last year, is stable. Vail Resorts last year inked a deal to become the majority owner of the posh RockResorts brand and expressed plans to expand that hotel company’s portfolio. Moodys also downgraded junk ratings on $280 million of American Skiings debt, including notes and bank credit, to as low as “Ca, the second-lowest grade before default. The company is trying to sell its Steamboat Ski Resort. The company last year was to merge with MeriStar, however, that deal was called off. Moody’s said American Skiing, which dodged bankruptcy last year, will most likely default on borrowings if it does not sell Steamboat and some real-estate assets “in the very near-term. Moodys did not change its rating on resort operator Intrawest Corp. of Canada, citing the firms “strong backlog of real estate properties. But Intrawest, owner of Copper Mountain Resort, was placed on negative credit watch, raising the possibility of a downgrade.
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