S&P may cut Mohegan

Standard & Poor's said it placed its ratings on Mohegan Tribal Gaming Authority, including its BB+ corporate credit rating, on CreditWatch with negative implications.

Also on watch are Mohegan Tribal Gaming Authority's senior secured debt at BB+, senior unsecured debt at BB, and subordinated debt at BB-.

The CreditWatch placement follows Mohegan's announcement that it has agreed to acquire The Downs Racing Inc. and its subsidiaries from Penn National Gaming Inc. (BB-/stable/--) for $280 million in cash. Under the terms of the agreement, the authority will acquire Pocono Downs and five off-track wagering operations throughout Pennsylvania. In addition to the $280 million acquisition cost, the authority anticipates spending up to $225 million to purchase the gaming license and build-out Pocono Downs for the planned installation of up to 3,000 slot machines at that facility.

The deal is subject to customary approvals and is expected to close by the end of 2004.

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