Mashantucket - The Mashantucket Pequot Tribe will pay $9.2 million to cancel nearly $37 million worth of outstanding debt in a bond exchange that would enable it to conclude a massive restructur ing.

In a statement released late Monday night, the tribe, which owns Foxwoods Resort Casino, said it planned to close on the deal July 1.

The tribe said it has reached agreements with two holders of notes paying 8.5 percent interest. One of the holders owns $34.8 million in notes and the other owns $2 million in notes, according to the tribe, which said it will pay the holders $9 million and $200,000, respectively, in cash.

A Foxwoods spokesman said the tribe would have no further comment until the deal closes.

The purchases will enable the tribe to reach the required thresholds for participation in bond-exchange deals it first offered in February. Amid a series of deadline extensions, the Mashantuckets reached agreements months ago with nearly all of the holders of $478 million in outstanding special revenue obligation bonds and nearly $367 million in outstanding subordinated special revenue obligation bonds.

Until Monday's announcement, the tribe had yet to reach agreements with holders of a sufficient percentage of nearly $500 million in outstanding notes.

The tribe has sought to reduce its overall debt of more than $2.2 billion to about $1.7 billion.

The tribe also announced Monday night it has modified the bond-exchange requirements governing its future investments.

The revisions redefine "permitted investment" to include a casino project it is pursuing with a partner in New York state's Catskills region. The tribe would be allowed to invest up to $25 million in the project. Only $5 million could be invested before a gaming license was secured.

Revised bond-exchange provisions also would allow the tribe to make additional investments of up to $10 million.

Foxwoods is partnering with New York City-based Muss Development on the Catskills project, a $300 million to $600 million plan to build a resort casino on the site of the former Grossinger's hotel in Liberty.

Foxwoods also is partnering on a $1 billion project in Milford, Mass., where it is competing for the one casino license the Massachusetts Gaming Commission is expected to award for the Greater Boston area.

b.hallenbeck@theday.com