S&P lowers Mashantucket Western Pequot

Standard & Poor's said it lowered its ratings on the Mashantucket Western Pequot Tribe, the owner of Foxwoods Resort Casino in southeastern Connecticut. The issuer credit rating was lowered to BB- from BB+.

The ratings were removed from CreditWatch, where they were placed with negative implications on July 16, and the outlook is stable.

The agency said the downgrade reflects an increase in the tribe's debt leverage to a level that is more than one turn above what was factored into the previous ratings. While S&P expects that leverage is fairly close to peak, the agency said it also anticipates very little improvement in this metric in fiscal year 2009 ended Sept. 30 as conditions in the Connecticut market will likely remain challenging. S&P also expects some incremental borrowing in the coming quarters.

The BB- rating reflects the tribe's high debt leverage, limited geographic diversity and significant historical and expected distributions to tribal members, S&P said.

These factors are partially tempered by the favorable demographics of the Connecticut market and limited new competition expected over the next two to three years, the agency said.

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