Foxwoods looks to debt restructuring

Mashantucket Western Pequot Tribal Nation, owner of the Foxwoods Resort Casino, is seeking to restructure at least $1.45 billion in debt as winnings dwindle, according to a person with knowledge of the situation.
A restructuring plan has been submitted to creditors and the Connecticut casino’s owners have hired Miller Buckfire & Co., a New York investment bank, as an adviser, said the person, who declined to be identified because the talks aren’t public.
Foxwoods, one of the largest casinos in the U.S. by gambling space, may become the biggest tribal casino company to default. The operation has lost business to the recession and competition from new casinos and racetracks with slot machine- style, video-lottery terminals in nearby states. Slot revenue fell 13 percent in July, the casino said on Aug. 14.
“Their options are very, very limited,” Megan Neuburger, an analyst at Fitch Ratings in New York, said last week in an interview. “They can’t do the types of things other debtors can in a restructure. Tribal casinos can’t do a debt for equity swap, they can’t raise cash by selling off assets on tribal land.”
Mashantucket has a $700 million revolver loan due in July 2010, $500 million in 8.5 percent bonds that mature in 2015 and $250 million of 5.912 percent bonds due in 2021, according to data compiled by Bloomberg. It may have other debts as well.
Closely held Foxwoods, based in Ledyard, Conn., once competed only with Atlantic City for gamblers in the northeastern U.S. Today gamblers can also visit the Mohegan Sun casino, operated by the Mohegan Tribal Gaming Authority, 10 miles away in Uncasville, Conn., and slot casinos in Pennsylvania; Yonkers, N.Y.; and Rhode Island. &#8226