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Moody's lowers Mohegan Tribal
Moody's Investors Service said it downgraded Mohegan Tribal Gaming Authority's corporate family and probability-of-default ratings to Caa2 from B3, secured notes to B3 (LGD3, 30%) from B1 (LGD3, 30%), senior unsecured notes to Caa1 (LGD3, 38%) from B2 (LGD3, 37%) and senior subordinated notes due 2015 to Caa3 (LGD5, 85%) from Caa2 (LGD5, 85%).
The outlook is negative. These actions conclude the review for downgrade begun on Sept. 21.
The downgrade reflects the view that Mohegan Tribal Gaming could find it difficult to refinance significant upcoming debt maturities without some impairment to bondholders given its high leverage with a debt-to-EBITDA ratio over 7 times, according to the agency.
There are limited near-term growth prospects for Mohegan Sun Casino and weak consumer gaming demand trends in the Northeastern United States is likely to continue, Moody's said.
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