Tuesday, October 14, 2008

Mashantucket Pequot Tribe's Credit Rating Lowered Again

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A major credit rating company, Standard & Poors, lowered the Mashantucket Pequot's credit rating from BB+ to BB-, the same rating as that of the Mohegan Tribal Gaming Authority.

The Mashantucket's lower rating was based on "the tribe's high debt leverage, limited geographic diversity and significant historical and expected distributions to tribal members." Mashantucket Pequot tribal members have been receiving over $100,000 in per capita payments annually for years in addition to upscale housing on their Reservation that many compare to a country club.

"While we expect that current leverage is fairly close to peak, we anticipate very little improvement in this metric in fiscal 2009, as conditions in the Connecticut market will likely remain challenging,” according to the Standard & Poor's statement.

The last month in which slot revenues at Mashantucket Pequot's Foxwoods casino increased over the prior year was in May, the month that they opened their MGM Grand at Foxwoods expansion. While the Mohegan Sun also saw a slot revenue increase in May, it was largely attributable to a larger hold percentage since the amount wagered at Mohegan Sun's slot machines in May actually declined from May of the prior year.