Moody's: Little Traverse Bay unchanged

Moody's Investors Service said the B2 corporate family rating and stable outlook of Little Traverse Bay Band of Odawa Indians remain unchanged after a settlement agreement was reached with the State of Michigan regarding the payment of compact fees. The agency believes that the settlement, which resolves the litigation, is favorable to Little Traverse Bay as it allows the company to recover approximately half of the amount in the court-administered escrow account corresponding to the previously due 8% compact fees. It also lowers the payment of compact fees to 6% from 8% of slot machines net win, starting in 2008, and authorizes further rate reduction should the company's revenues be penalized by new gaming competition in the State of Michigan.

However, Moody's also noted that Little Traverse Bay's 2007 EBITDA was 18% below plan and 3% below the previous year's performance due to higher operating expenses. While Little Traverse Bay's 2007 financial metrics - including a total debt-to-EBITDA ratio of slightly less than 5 times - still adequately position it in the B2 rating category, the agency said it expects cost reductions in the near term in order to offset weaker top-line prospects.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.