NEW YORK – In announcing a bond-rating review of Waterford Gaming LLC and its subsidiary, Waterford Gaming Finance Corp., Moody’s Investors Service cited the gaming company’s relationship to the Mohegan Tribal Gaming Authority.
On Friday, three bond ratings for Waterford Gaming – which purchased Lincoln Park for $435 million in 2004, before renaming the facility Twin River and spending $220 to expand and refurbish it – were targeted for review and possible downgrade.
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The three ratings in question are: B1, the rating for Waterford’s corporate family; Ba3, its rating for probability of default; and B1, for senior unsecured notes. The review could affect about $118 million of rated debt securities, Moody’s said.
The review follows a similar action taken by Moody’s on Thursday, when it said it would review at least four bond ratings for the Mohegan Tribal Gaming Authority (MGTA), in “response to the company’s continued vulnerability to the weak U.S. economy and increased competition in the Northeast.”
Twin River parent Waterford’s revenue is “substantially” derived from its partnership interest in Trading Cove Associates, which receives a 5 percent revenue-based relinquishment fee from the gross revenue of the MGTA’s Mohegan Sun casino, Moody’s reported.
“During its review, Moody’s will assess the potential implications of MTGA’s deteriorating operating performance and financial profile on the amount of cash distributions to Waterford and the company’s continuous ability to meet its coupon payments and de-lever its balance sheet,” the agency said.
For the quarter ending June 30, MTGA’s revenue after expenses was $58.8 million, down 41 percent from the same period in 2007, according to Moody’s. The agency cited costs of the $925 million development, dubbed Project Horizon, the tribal gaming authority has undertaken at the Mohegan Sun.
A review of bond ratings also has been announced for the Mashantucket Pequot Tribal Nation, spurred by three consecutive quarters of declining revenue at the tribe’s Foxwoods Resort Casino, according to Moody’s. It “appears that this trend may continue based on the tribe’s recent announcement that the July 2008 monthly slot win for Foxwoods declined 3.4 percent from the comparable prior-year month,” the agency said.
Waterford Gaming LLC, a subsidiary of Waterford Group LLC, was a founding partner of Mohegan Sun casino in Connecticut and a partner in the 2004 purchase and renovation of the former Lincoln Park, now Twin River. For more information, visit www.waterfordgroup.net.
Moody’s Investor Service is a global source for credit ratings, research and risk analysis serving more than 9,300 customer accounts and about 2,400 institutions. For more information, go to www.moodys.com.
