Foxwoods discussing bankruptcy
(CNN 9/1/09) ) MASHANTUCKET, Conn. -- The world’s largest Indian gaming casino is juggling a known debt of $1.4 billion. The Mashantucket Pequot Tribal Nation has a loan payment due Tuesday and members of the tribe met Monday to discuss the situation.
Foxwoods Resort Casino is one of the largest casino destinations in the world and is owned by the Mahantucket Pequot Tribe and partners with MGM in the MGM Grand Casino on the sprawling reservation in Ledyard.
The downturn in the economy has had a tremendous impact on the gaming industry. In July, the casino said slot revenue dropped 13 percent compared to a year ago. Tribal members met in closed door meetings Monday as attorneys, communication specialists and financial experts worked on a debt restructuring plan with creditors.
“We still have a steady flow that comes regularly, but as far as many buses coming through here, there’s not,” said employee Teresa Ellis.
According to one ratings expert in New York, tribal casinos
can’t do a debt for equity swap. They can’t raise cash by selling off assets on tribal land to repay creditors.
“Across the board, anyone who invests in tribal debt, banks and bonds, the whole financial community is looking at how this plays out,” said Megan Neuburger, analyst at Fitch Ratings.
Last week Standard and Poor cut its Mashantucket rating and placed the tribe’s debt on credit watch.
No tribal casino has tested bankruptcy laws.
Last week, the chairman of the tribe, Michael Thomas, reportedly indicated that the tribal government would be paid before bankers or bondholders