Hollywood Park Ratings Assigned by S&P; OutlkStable.

NEW YORK--(BUSINESS WIRE)--S&P CreditWire 7/23/97--Standard & Poor's today has assigned its single-`B' rating to Hollywood Park Inc.'s $125 million subordinated note offering due 2007. A corporate credit rating of double-`B'-minus also has been assigned.

In addition, Standard & Poor's

has assigned its double-`B'-plus rating to the company's $100 million revolving credit facility due 2002. The facility is currently $225 million, but will be reduced dollar for dollar by the amount of the subordinated note offering. The bank facility is secured by liens on substantially all the assets of the company. Among those assets are 378 acres of land in the Los Angeles area (including the Hollywood Park Race Track), 150 of which are currently undeveloped. The fair market value of the land was estimated at approximately $200 million as of March 31, 1997. In simulating a default scenario, Standard & Poor's significantly reduced the value of the land, and also assessed a distressed level of cash flows from the company's operating assets, capitalized with a conservative multiple. The resulting combined value is more than sufficient to suggest full recovery of the loan facility following the note offering.

The corporate credit rating reflects Hollywood Park's current low debt leverage and the stable cash flows from its race tracks, card clubs, and New Orleans riverboat casino, offset by competitive pressures in Biloxi, Miss. and a potentially aggressive growth strategy.

Hollywood Park operates the Hollywood Park and Turf Paradise Race Tracks in Inglewood, Calif. and Phoenix, Ariz., respectively; it owns two card clubs in the Los Angeles metropolitan area; and it operates casinos in Reno, Nev., Biloxi, Miss., and New Orleans, La. Hollywood Park Race Track is one of the top tracks in the country in terms of handle, which has increased despite declines in wagering at the track. Its adjacent card club, as well as a newly opened card club nearby that is currently leased, generate relatively predictable cash flow. Hollywood's first significant move into the casino business occurred in April 1996 with the merger with Boomtown, Inc. Since that time, Boomtown's money-losing Las Vegas property has been divested, costly operating leases have been, or are in the process of being eliminated, and its high coupon debt has been redeemed. Still, of the three casino properties left, the New Orleans facility is the only one that has been a consistent performer. The Reno property has suffered over the past two years from a lack of investment, and faces challenges as it seeks to rebuild its customer base and image. The Biloxi property, despite recent improvements, will be tested with the opening of Imperial Palace next door sometime this year. In addition, the arrival of Mirage Resorts along the Gulf Coast in 1998 could divert traffic from the Back Bay area where Boomtown resides.

Pro forma for the offering and current operating trends, debt leverage is expected to be low for the rating at under 3 times (x) EBITDA. However, the rating anticipates that future gaming acquisitions will likely boost leverage to levels more consistent with the rating. About $35 million in capital expenditures are planned for the Reno and New Orleans properties, which will be funded largely from free cash flow and cash balances. Flexibility is enhanced with an undrawn $100 million revolving credit facility and the California real estate.

OUTLOOK: Stable.

Hollywood Park's good balance sheet and financial flexibility puts it in a position to be a consolidator in the fragmented riverboat gaming market. While debt levels will increase with future acquisitions, the addition of quality casino assets will help bolster the company's overall business position. The rating currently does not factor in the potential conversion to a REIT structure, due to the uncertainty regarding that event. Still, the credit implications are not expected to be significant in either direction, and the event would trigger a change of control, enabling bondholders to put the bonds at a premium to par. ---CreditWire

CONTACT: Greg Zappin, 212/208-8615