Moody's downgrades Mashantucket

Moody's Investors Service said it lowered the Mashantucket (Western) Pequot Tribal Nation's corporate family and probability-of-default ratings to B1 from Ba3, subordinated special revenue obligations to B2 (LGD5, 73%) from B1 (LGD5, 71%) and 2007 series A notes to B3 (LGD6, 90%) from B2 (LGD5, 89%) and affirmed the special revenue obligations at Ba2 (LGD2) with a revised loss-given-default rate of 29% (previously 27%).

This concludes the review that began Feb. 3, and the outlook is negative.

The agency said the downgrade is based on its expectation that weak gaming demand trends in the Connecticut gaming market will make it difficult for the tribe to meaningfully reduce leverage over the near to medium term to levels acceptable to the prior rating. The debt-to-EBITDA ratio for the 12-month period ended Dec. 31 was slightly above 7 times.

The negative outlook acknowledges that the tribe remains weakly positioned within its current rating category, Moody's said.

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