Tribe extends forbearance agreement with lenders
Mashantucket — The Mashantucket Pequot Tribe, which owns Foxwoods Resort Casino, has extended a forbearance agreement with senior lenders as it deals with $1.7 billion in debt.
The agreement, in which lenders refrained from taking action against the tribe after it failed to meet terms of a financial restructuring, has been extended to Dec. 31, Bill Satti, director of the tribe’s Office of Legislative Affairs, confirmed Wednesday.
The agreement, struck late last year, was to have expired Tuesday, June 30. The tribe provided no details of the extension.
The Mashantuckets defaulted on a $2.3 billion debt in 2009 before embarking on a complex restructuring process that involved a series of forbearance agreements and took nearly four years to complete. Finalized in July 2013, the restructuring agreement eliminated $550 million of the debt.
In August, the tribe announced it had again entered into discussions with senior lenders after failing “to comply with certain financial covenants” in the restructuring agreement. The tribe acknowledged at the time that expected improvements in economic conditions and “a leveling out of competitive factors” had been slow to materialize.
Foxwoods’ annual report for the fiscal year that ended Sept. 30 contained a so-called “going concern” opinion from auditors who noted uncertainty surrounding the expiration of the forbearance agreement.
Moody’s Investors Service, a leading credit-rating agency, lowered its rating on the tribe's debt earlier this year, saying the tribe would likely have to go through another debt-restructuring.
Foxwoods’ business has since picked up. An enclosed shopping mall linking the casino’s two towers opened in May, boosting casino traffic.
The tribe also is working on two other potential revenue streams. It's partnering with a developer vying for a license to operate a southeastern Massachusetts casino in New Bedford, and it's partnering with the Mohegan Tribe on a plan for a north central Connecticut gaming facility that would compete against a resort casino being built in Springfield, Mass. The Mashantucket-Mohegan venture is still subject to state legislative approval.
Twitter: @bjhallenbeck
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