Published July 01. 2013 5:00PM Updated July 02. 2013 12:18AM
The Mashantucket Pequot Tribal Nation announced Monday an agreement with creditors that includes forgiveness of $550 million in outstanding debts while securing $25 million in loans and financing to potentially bring the Foxwoods Resort Casino brand to the Catskills in New York state.
The Mashantucket Tribe, which owns Foxwoods, said the long-anticipated restructuring would affect $2.3 billion in debt obligations, and would extend the time over which money is paid back.
“The completion of our balance sheet restructuring is an historic occasion for Foxwoods and for the relationship between Wall Street and Native American gaming enterprises,” Scott C. Butera, Foxwoods chief executive, said in a statement.
“With our new capital structure in place, we have long-term financing at favorable rates,” he said. “And along with the improvements we’ve made in our operations — from streamlining our cost structure to advancing our service and revamping our marketing — we are now in a strong position to build our gaming and hospitality business in the region.”
The tribe said the restructuring accounts for all of its current creditor claims. In addition, Foxwoods is gaining access to $5 million in revolving credit and a $20 million term loan. Each of the new loans is over a 30-month period.
Holders of Mashantucket Pequot Tribal Nation bonds will receive new securities with maturities lengthened to 13, 18 and 23 years, depending on how long they have been held.
“This is truly a milestone event for (the Mashantuckets) and Indian Country as a whole,” Tribal Council Chairman Rodney Butler said in a statement. “The new capital structure not only allows Foxwoods to move forward as a stronger competitor, it also renews the financial stability of our entire tribal nation.”
The tribe has been negotiating since February to try to reduce its overall $2.3 billion in debt to $1.7 billion. The last hurdle to overcome was agreements from bondholders holding nearly $500 million in notes, but the tribe announced last week that enough investors had agreed to reduced payments to proceed with a bond exchange.
Foxwoods and partner Muss Development of New York City are working on a plan to bring a multimillion-dollar resort casino to the Catskills at the site of the former Grossinger’s hotel in Liberty. It also is competing for the license on a Massachusetts casino in the Boston area.