The Day – Moody’s issues note on Mashantuckets term loan extension

Moody’s Investors Service flagged some of the Mashantucket Pequot Tribe’s long-term debt, adding a “limited default” designation to its likelihood of default rating.

Moody’s announced on Tuesday that the designation was prompted by the tribe’s recent decision to extend the maturity of a loan from February 16, 2022 to February 16, 2025. As of December 31, 2021, the tribe owed approximately $244.3 million. on the loan, which was originally $275 million, according to the tribe’s latest quarterly report.

Moody’s said it would remove the designation in about three business days.

The rating agency assigned a Caa1 rating to the loan, a rating associated with bonds deemed “poor quality” and “subject to very high credit risk”.

Moody’s said it views the maturity extension as equivalent to a missed principal payment. Without the extension, Moody’s believes the Tribe, which owns and operates Foxwoods Resort Casino, would not have been able to repay the loan in full “given that current cash flows, although cash balances positive and available are not sufficient to meet all of Mashantucket’s debts”. duty of service. »

The tribe is staying up to date on loan interest payments, Moody’s said.

The extension of the maturity did not constitute an event of default under any of the tribe’s debt agreements, Moody’s noted. The tribe and its lenders operate under a forbearance agreement that has been extended several times since it took effect in 2014.

“We are pleased with the outcome of the latest forbearance extension and continue to have a good working relationship with our lenders,” Tribe Chairman Rodney Butler said in a statement. “Despite our default in 2014, we were able to significantly pay off our bank debt, serve our tribal community, reinvest in our property, and continue our philanthropic efforts in the region.”

The tribe’s other debts amount to about $1.8 billion, according to Moody’s.

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Dorothy H. Lewis