Mohegan Sun casino fails to refinance $811M debt

UNCASVILLE, Conn.?

The parent company of the Indian-run Mohegan Sun casinos in Connecticut and Pennsylvania says it has failed to reach an agreement to refinance $811 million in debt, but lenders have waived a possible default.

The Mohegan Tribal Gaming Authority said Thursday that a delay in refinancing debt was among conditions that "raise substantial doubt about our ability to continue as a going concern."

Mitchell Etess, chief executive of the authority, which owns and operates the Mohegan Sun in Uncasville and Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa., told The Associated Press on Friday that the dire warning is only a financial requirement of auditors.
"Auditors have no choice," he said. "They must put in that language."

Etess cited the waiver as a vote of confidence by lenders and cited fourth-quarter income of $46.7 million, compared with a $26.3 million loss in the same quarter last year.

Etess said refinancing is taking a long time because of the weak recovery following a deep and prolonged recession that has sharply cut into consumers' entertainment spending.

He also cited the "status of Native American gaming financing" generally.

"Those impacts that have happened in the outside world have impacted our bondholders' thoughts as we go through the process," Etess said.

The neighboring Mashantucket Pequot Tribal Nation in eastern Connecticut has worked to restructure billions of dollars in debt after its Foxwoods casino was hit hard by the economic downturn and increased competition in the Northeast.

Last month, the Mississippi Band of Choctaw Indians received a six-month extension on loans to May.

And in Washington state, revenue at some tribal casinos fell as much as 30 percent at the start of the recession, forcing tribes to struggle with ways to refinance debt on new casinos and other ventures.

A report issued in March said that for the first time, revenue fell in 2009 at American Indian gambling casinos nationwide as the recession forced consumers to curtail spending. The report by economist Alan Meister of Nathan Associates Inc. said casinos generated about $26.4 billion in 2009, down 1 percent from 2008.

AP-WF-12-30-11 1813GMT

Source: http://www.courant.com/news/local/statewire/hc-ap-ct-mohegansun-debtdec30,0,2033175.story?track=rss

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