Mashantucket - Financial pressure on the Mashantucket Pequot Tribe, weighed down by $1.7 billion in debt related to Foxwoods Resort Casino, mounted Friday as Standard & Poor's Ratings Services announced that the tribe had defaulted on an unspecified amount of its obligations.

But Scott Butera, outgoing chief executive of Foxwoods, downplayed the announcement, saying the missed payment had been announced previously in an Aug. 14 regulatory filing that showed that the tribe had failed to make a debt payment to Bank of America Corp. and was trying to find a way to remedy the situation.

"There's been no additional event," Butera said.

He acknowledged, however, that S&P's decision to lower the tribe's credit rating from CC, which meant it was vulnerable to nonpayment, to SD (selective default), which indicates that it was not paying on a specific type of debt, was a new development.

He insisted, however, that the default was not putting additional pressure on the tribe to restructure its debt for the second time in a little over a year.

"We're not involved in a restructuring," he said. "It's business as usual. We're in discussions with our banks."

But others said they believe a restructuring is inevitable. Even after the Mashantucket announcement in June that it had reached agreements with creditors to forgive $550 million in outstanding debts, the tribe still appeared to be overleveraged, relying largely on a rebound in the economy to pay off its debts, said Alex Bumazhny, director of gaming, lodging and leisure at Fitch Ratings Service.

Unfortunately, he said, the recovery in the Northeast's gaming market has never come, and revenues continue to dwindle.

"This is not a surprise to us at all," Bumazhny said in a phone interview Friday.

Moody's Investors Service also mentioned in an August report that "some form of debt restructuring" on the part of the Mashantuckets appeared likely.

S&P said it expects that the Mashantuckets would remain current on payments to senior lenders. It previously had predicted that the tribe would be about $20 million short in paying its debt-service obligations this year to lenders.

"The downgrade reflects Mashantucket's inability to make full and timely interest payments to its junior debt holders on Sept. 30, 2014, because it received a blocking notice from senior lenders," Standard & Poor's credit analyst Carissa Schreck said in a statement.

Bumazhny described the scenario as a "waterfall situation" in which debt holders at the bottom will stop receiving payments first, potentially followed by others upstream.

S&P, in an August report, said it does not foresee economic conditions improving anytime soon at Foxwoods.

"Mashantucket continues to experience declines in visitation and average consumer spending per trip," the ratings agency said.

It cited new table games installed at Twin River Casino in Rhode Island as one factor in Foxwoods' revenue slide.

The Mashantuckets first defaulted on their debt five years ago, but continued to operate under forbearance agreements until debt was restructured last year. The restructuring reduced the tribe's debts from $2.2 billion to $1.7 billion.

l.howard@theday.com

Twitter: @KingstonLeeHow