Thursday, January 21, 2010

Mashantucket Tribe Announces Debt Restructuring Extension With Creditors

Feather News

The Mashantucket Pequot Tribe announced that is has reached an agreement in principle with a majority of their senior lenders to extend until April 30 the sovereign Indian nation´s efforts to restructure its debt.

The proposed forebearance agreement was announced by the Tribe´s public relations firm yesterday, the original date by which the Mashantuckets were to have restructured their debt as agreed to in November when the Tribe missed a scheduled interest payment.

The creditors agreed not to pursue default rights against the Tribe for missed loan payments during the restructuring-forebearance period. The missed interest payment last November was on a $500 million bond package, only one piece of the Tribe´s total debt load of about $2.5 billion.

A $700 million revolving loan that is due this summer will likely be restructured.

The Tribe´s then-chairman Michael Thomas anticipated a likely default when he wrote to the Tribe´s members promising to pay them before the creditors in any debt restructuring, a move that led to Thomas being placed on administrative leave. Thomas did not seek re-election in the Fall.

The Tribe has since hired a public relations firm, Joele Frank, Wilkinson Brimmer Katcher, and has said that it would pursue a mutually beneficial resolution with its banks and bondholders.