* Sazka cut to 'D', the lowest rating
* Creditor pressures firm to pay other debt
* Sazka to hold news conference on Friday
(Adds quote, Sazka comment, background)
PRAGUE, Jan 13 (Reuters) - Credit rating agency Standard &
Poor's cut Czech betting company Sazka's long-term corporate
credit rating to default on Thursday, after the firm failed to
make a full payment on its mortgage-backed bond.
The lottery operator said it missed a 4 million euro ($5.26
million) principal payment on its 9-percent coupon bond maturing
in 2021 <CZ025854705=> but paid the 9.2 million euro interest.
Sazka was cut to 'D' from 'CC', Standard & Poor's said.
"The downgrade follows Sazka's non-payment of principal,"
said Standard & Poor's credit analyst Marketa Horkova.
"The downgrade further reflects Sazka's failure to reach an
agreement with senior creditors to obtain a rollover of
short-term loans that matured in the last two weeks of December
2010."
Sazka, which S&P said has 94 percent of the Czech lottery
market and 6 percent of the country's gaming market, had warned
bond holders last month it could not make full payment and said
it held meetings with them to discuss debt restructuring.
A Sazka spokesman said the firm had counter claims against
other debt that was due.
The bond was quoted at 60.0/64.0 with yield of 22.874/20.872
percent on Thursday, according to Reuters data.
The lottery firm, owned by Czech sports unions, saw its debt
soar after it built a covered sports arena in Prague for the
2004 ice hockey world championships. The bonds are backed by the
18,000-seat arena.
Several potential investors have proposed various plans to
Sazka, including a purchase and restructuring, but shareholders
and management have not endorsed giving away equity in the firm.
Privately held Penta Investment, the majority owner of rival
odds-betting company Fortuna <FOREsp.PR>, has proposed to buy a
majority stake or the whole of Sazka.
Czech investor Radovan Vitek has been buying Sazka debt owed
to banks and, including the latest agreement with bank J&T
Banka, should control debt of Sazka and related parties worth
1.45 billion Czech crowns ($78.12 million), mostly past
maturity.
Vitek, who has threatened to push Sazka to insolvency if it
does not pay its due debt by Jan. 17, has said he is interested
in buying Sazka bonds from current holders.
Sazka said it would hold a news conference on Friday to
address its situation.
(Reporting by Jana Mlcochova, additional reporting by Roman
Gazdik, editing by Jan Lopatka and David Hulmes)
