Little Traverse Bay Bands of Odawa Indians completes restructuring

By Caroline Salls

Pittsburgh, Nov. 30 - The Little Traverse Bay Bands of Odawa Indians completed a financial restructuring when an offer to exchange its 10¼% senior notes due 2014 closed on Tuesday, according to a news release.

The tribe said the transaction will result in the exchange of $143 million of existing senior notes and related interest for $23 million of cash and $40 million of new 9% senior secured notes due 2020.

"This transaction ensures that we will have the resources necessary for us to continue to invest in our resort, provide jobs for our community and support current and future generations of our tribal membership," tribal chairman Ken Harrington said in the release.

The tribe issued the original notes in February 2006 to fund the development of the Odawa Casino Resort in Petoskey, Mich.

Since opening in June 2007, the tribe said the casino has generated revenues substantially below the financial forecast developed at the time of the financing, having adverse effect on the tribe's ability to meet its debt obligations.

The tribe failed to make interest payments on the existing notes since February 2009.

Oppenheimer & Co. Inc. investment banking director Douglas S. McDonald said this is believed to be the first completed Native American restructuring of its kind.

"This transaction, which we believe is the first completed restructuring of its kind, is precedent setting in Indian Country and was the result of thoughtful planning, negotiation and cooperation between our Tribal Council and our bondholders," Harrington said in the release.

According to the release, the exchange offer is the culmination of over a year of negotiations and an agreement that was reached between the tribe and an informal committee representing bondholders on Aug. 7. The committee represented $106.5 million, or 87%, of the 10¼% senior notes.

Oppenheimer acted as exclusive financial adviser to the tribe and as dealer manager for the exchange offer and consent solicitation.

Fredericks Peebles & Morgan LLP acted as counsel to the tribe, while Dechert LLP acted as counsel to the committee of bondholders.

Little Travers Bay Bands of Odawa Indians is the owner and operator of Victories Casino and Victories Hotel in Petoskey, Mich.

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