IN AUGUST, 2008 MOODY'S INVESTMENT SERVICE ANNOUNCED THAT BOTH THE MOHEGAN SUN AND FOXWOODS RESORT CASINO COULD BOTH FACE A DOWNGRADE IN THEIR CREDIT RATINGS. LAST FRIDAY, S & P LOWERED THE MASHANTUCET PEQUOTS CREDIT RATING FROM BB+ TO BB- . STANDARD AND POOR'S RATING SERVICE SAID, THE DOWNGRADE IS A REFLECTION OF AN INCREASE IN THE TRIBE'S DEBT LEVERAGE.
STANDARD AND POORS IS REPORTED TO HAVE SAID, "WHILE WE EXPECT THAT THE CURRENT LEVERAGE IS FAIRLY CLOSE TO PEAK, WE ANTICIPATE VERY LITTLE IMPROVEMENT IN THIS METRIC IN FISCAL 2009, AS CONDITIONS IN THE CONNECTICUT MARKET WILL LIKELY REMAIN CHALLENGING."
BOTH CASINOS HAVE BEEN DOWN THE LAST TWELVE MONTHS, EXCEPT FROM A SLIGHT PUMP UPWARD IN MAY WHEN THE MASHANTUCET,S OPENED THE NEW MGM GRAND HOTEL AND CASINO AT FOXWOODS. THE NEW MGM HOTEL CASINO HAS ADDED SOME REVENUE TO FOXWOODS. HOWEVER THE INCREASED EXPENSES ARE USING IT ALL UP.
FOXWOODS IS CURRENTLY PLANNING TO LAYOFF 700 EMPLOYEES WITH IN THE NEXT FEW WEEKS. THE MOHEGAN SUN CASINO STOPPED CONSTRUCTION OF THE EARTH TOWER (PROJECT HORIZON HOTEL) AT AN ESTIMATED SAVINGS OF 734 MILLION DOLLARS ($734,000,000.00). THE MOHEGAN SUN, HAS SAID IT DOES NOT PLAN TO LAYOFF ANY WORKERS. INSTEAD THE MOHEGAN SUN HAS AN ATTRITION POLICY (A GRADUAL REDUCTION IN THE WORK FORCE WITHOUT THE ACTUAL FIRING OF PERSONNEL , AS WHEN WORKERS RESIGN OR RETIRE.
WHAT WILL THE STANDARD AND POOR'S CREDIT RATING FOR THE MOHEGAN SUN BE? COULD WHAT HAPPENED TO FOXWOODS RESORT CASINO, HAPPEN TO US? MAYBE WE NEED TO WORK ON LOWERING OUR DEBT? MAYBE IT IS NOT A GOOD TIME FOR THE MOHEGAN TRIBE TO BE SPENDING AN ESTIMATED EIGHTY NINE MILLION DOLLARS ($89,000,000.00) ON THE GOVERNMENT COMMUNITY CENTER? WHAT DO YOU THINK?
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