MOHEGAN DEBT

Mohegans review debt situation as profits slide
By Brian Hallenbeck

The Day

Published 10/15/2009 12:00 AMUpdated 10/15/2009 06:34 AM0

Mohegan - Reporting steep declines in revenues and profits, Mohegan Sun's operator announced Wednesday it intends to restructure nearly $200 million worth of debt.

In separate statements, the Mohegan Tribal Gaming Authority released its preliminary operating results for the three months and the fiscal year, both ending Sept. 30, and disclosed its plan to privately offer notes due in 2017 to repay $147 million in term loans and $48 million in revolving loans. It will permanently reduce its line of credit with a banking syndicate by $25 million.

"The notes will be collateralized by a second lien on substantially all of the Authority's property and assets …" the authority said in a statement.

Authority officials would not comment on the restructuring or on the preliminary financial results released Wednesday.

The authority, which also operates Mohegan Sun at Pocono Downs, a Wilkes-Barre, Pa., racetrack casino, reported that its net income, or profit, for its 2009 fiscal year - Oct. 1, 2008 to Sept. 30, 2009 - is expected to range between $115 million and $120 million, a decline of between 20 and 23 percent over fiscal 2008.

For the fourth quarter of fiscal 2009 - July, August and September - the authority's net income is expected to be between $63 million and $66 million, down 24 to 27 percent over the same period in fiscal 2008.

The figures are just the latest evidence of the recession's impact on gaming. Plummeting revenues have taken an even greater toll on Mohegan Sun's neighboring competition, Foxwoods Resort Casino, which currently is negotiating with lenders as it seeks to restructure a debt of more than $2 billion.

The Mohegan authority is expected to finalize its quarterly and year-end results and conduct a conference call with investors and industry analysts next month.

According to Wednesday's statement, the authority expects its adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) for the fourth quarter of fiscal 2009 to range between $81 million and $84 million. Compared to the same quarter in fiscal 2008, the range would be between a 2 percent decline and a 2 percent increase.

Slot-machine revenues for the quarter are expected to range between $250 million and $260 million, a decline of between 6 and 10 percent. Table-games revenues are expected to range between $71 million and $74 million, down between 23 and 26 percent.

Nongaming revenues in the quarter are expected to decline by 13 to 16 percent.

For the 2009 fiscal year, EBITDA is expected to be between $297 million and $309 million, ranging from a 2 percent decline to a 2 percent increase.

The authority also reported that its total debt as of Sept. 30 was about $1.64 billion.

Distributions to the Mohegan Tribe totaled $72 million during the fiscal year, according to the authority, which reported that the distributions are expected to range from $59 million


EDITORIAL FOOTNOTE: I don't know how many Mohegan Tribal Members receive stipends, but if the tribe had say 1100 members who could get tribal stipends, and the money brought over from the casino was down from $72 Million ($72,000,000.00) to $59 Million ($59,000,000.00) it would come to a loss of about $12 Thousand ($12,000.00) each member. Could something like this be possible? Is this going to happen? Why didn't the newly elected Tribal Councilors tell the membership about this situation, when they were running for re-election? Should the membership get 40% of the voting membership to remove these people? What do you think?