ABOUT A MONTH AGO, STANDARD AND POORS (CREDIT RATING SERVICE) LOWERED THE MOHEGAN SUN (MTGA, MOHEGAN TRIBAL GAMING AUTHORITY) CREDIT RATING FROM BB TO BBB-.
ON TUESDAY NOVEMBER 18, 2008, MOODY'S INVESTOR'S SERVICE ( A WALL STREET CREDIT RATING COMPANY) DOWN GRADED MOHEGAN SUN CASINOS (MTGA) TO A B-1 RATING. A B-I RATING IS DEFINED AS LACKING CHARACTERISTICS OF A DESIRABLE INVESTMENT. MOODY'S USES A DEBT TO EARNINGS POTENTIAL TO FIGURE A COMPANY'S CREDIT RATINGS.
MOODY'S STATED THAT NEGATIVE GAMING TRENDS IN CONNECTICUT AND SIGNIFICANT DIVIDENDS PAID TO THE MOHEGAN TRIBE WILL HAMPER THE COMPANY FROM LOWERING THE DEBT TO EARNINGS RATION IN THE NEAR TERM. THIS MEANS THAT WHEN, THE MOHEGAN SUN CASINO WANTS TO BORROW MONEY IN THE FUTURE, THAT THE INTEREST RATES WILL BE CONSIDERABLY HIGHER.
THE MASHANTUCKET PEQUOTS CREDIT RATING WAS ALSO LOWERED BY MOODY'S. MOODY'S REPORTLY STATED A "WEAKNESS IN GAMING TRENDS IN CONNECTICUT AND THE NORTHEAST WILL HAMPER THE COMPANY FROM LOWERING ITS DEBT TO EARNINGS RATIO OVER THE NEXT SEVERAL YEARS TO A LEVEL APPROPRIATE TO ITS FORMER INVESTMENT GRADE RATING."
THE MOHEGAN SUN CASINO IN 2009, MUST PAY OFF BONDS, ESTIMATED AT THREE HUNDRED AND THIRTY MILLION DOLLARS ($330,000,000.00). THE ONLY WAY I CAN SEE THESE BONDS CAN BE PAID OFF IS FOR THE MOHEGAN TRIBAL GAMING AUTHORITY TO BORROW MORE MONEY OR ISSUE MORE BONDS.
AT WHAT INTEREST RATE? WHEN TIMES WERE BETTER, WHY DIDN'T THE MTGA TRY AND PAY DOWN ITS DEBT? WHAT IS THE MTGA GOING TO DO TO CHANGE ITS DEBT TO EARNINGS RATIO/ ARE CUTS COMING TO THE MOHEGAN PEOPLE? ARE CUTS COMING TO MOHEGAN GOVERNMENT? SHOULD THE MOHEGAN GOVERNMENT BE BUILDING A GOVERNMENT BUILDING WHICH I DON'T BELIEVE WE HAVE THE FINANCING DONE YET? AT WHAT INTEREST RATE? WHAT DO YOU THINK?
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