Don Barden's North Shore casino was hit with another low credit rating yesterday, but this one was tempered by a stable outlook, reflecting confidence in the ultimate success of the project.

Moody's Investors Service said the B3 rating for PITG Gaming HoldCo, a company set up as part of the casino's financing, reflected concerns about the start-up nature of the project and the heavy debt it will carry, with no cash equity from Mr. Barden or any of the other investors.

The agency also raised concerns about the expectation of a "very high interest burden" given the current capital markets as well as potential competition for customers from the Meadows, which expects to have a permanent casino with 4,200 slot machines in place by June 2009.

But in assigning a stable outlook, Moody's said it was anticipating that the slots parlor would be built on time and on budget and that "favorable demographics of the Pittsburgh gaming market along with the location of the casino itself will provide enough customer traffic and demand for PITG to ramp up successfully."

Moody's is the second agency to assign a low credit rating to PITG Gaming. Standard and Poor's issued a B-minus rating with a negative outlook last week, citing similar concerns to those raised by Moody's. At the time, an S&P analyst said the rating and outlook suggested the project "is highly vulnerable" given the lack of cash equity and heavy borrowing.

S&P estimated the payments on $800 million in loans PITG Gaming plans to secure for the casino at nearly $80 million a year. It will have to generate $80 million to $85 million just to service the loans and cover operating expenses, S&P projected.

Mr. Barden has estimated that his casino, at full operation with 5,000 slot machines, would generate $450 million to $475 million a year in revenue, with more than half of that going to the state in taxes.

Keith Foley, senior vice president of the corporate finance group for Moody's, said the B3 rating is at the lower end of the speculative grade category typically assigned to casinos.

But it is not unusual for a start-up construction, he added. Those projects are "typically rated at the low end of the B scale. It's very rare that they are rated higher than that," he said.

Besides the worries about the high debt and lack of equity, Mr. Foley said another concern is the slowing economy, which "could pose a risk in terms of ramp up."

Other factors on the positive side is the "good risk/reward profile of the casino development project and the fully funded nature of the project," including adequate construction contingencies and an interest reserve to meet debt service obligations during the building.

Casino spokesman Bob Oltmanns said the Moody's report and the stable outlook are "more in line with our thinking, particularly where they refer to the risk/reward profile."

To fund the casino, Mr. Barden is seeking $650 million in financing from international lender Credit Suisse and $150 million from another source. He hopes to close on the loans by May 19. The financing, which substitutes bank loans for bond financing, is under review by the state Gaming Control Board.

Mr. Barden is under a lot of pressure to get the casino up and running in May 2009, and not only as a means to get tax revenue rolling for the state. He has pledged Barden Nevada Gaming, owner of his Fitzgerald's casino in Las Vegas, as part of an agreement guaranteeing the completion of the Pittsburgh slots parlor by a mutually agreed upon date.

The maximum liability of Barden Nevada Gaming under the agreement is $25 million, according to a petition filed before the gaming board.

Anne LaCour Neeb, the gaming board's executive director, said she anticipates no problem with Mr. Barden closing on the financing. She said that based on conversations with PITG Gaming officials and the lending group, "I don't see why he wouldn't get financing."

Ms. Neeb said Mr. Barden switched from bond financing to bank loans because the "bond market is bad right now. The financial markets right now are not in good shape. It has nothing to do with the applicants. It has to do with the financial markets."

As for the credit ratings, Ms. Neeb noted that nearly all gambling companies have been rated at speculative grade. Compounding that is that the rating agencies "know it's a terrible credit market" right now, she said.

Meanwhile, state Rep. Jake Wheatley, D-Hill District, said yesterday he was trying to set up a conference call for later this week between Mr. Barden, himself, and other state legislators to discuss PITG finances and other issues related to the casino.

Mr. Wheatley said he is concerned that the casino project is "getting bogged down in local malaise" and wants to see how legislators can "become active participants in helping to drive this faster and protecting the public interest."

Mr. Barden said Monday he would honor a $3 million commitment he made to the Hill District as part of his casino bid after it was agreed during a meeting with Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato that it wouldn't be used for the Mellon Arena property the Penguins intend to develop.

He had petitioned the gaming board to drop the commitment because he didn't development rights to that land.

That pledge originally was $1 million annually over three years. Now Mr. Barden said the money could be awarded over five years. Mr. Wheatley said he supports the agreement, which likely will need gaming board approval.