S&P rates Mohegan notes BB-, B+

Standard & Poor's said it assigned its BB- rating to the Mohegan Tribal Gaming Authority's proposed $200 million senior unsecured notes due 2013 and its B+ rating to Mohegan's proposed $200 million senior subordinated notes due 2015.

Net proceeds from these transactions will be used to repay amounts outstanding under its bank credit facility, $280 million of which related to the acquisition of the Pocono Downs racetrack.

At the same time, S&P affirmed its ratings on Mohegan, including its BB corporate credit rating, BB bank loan rating and the BB+ senior secured rating on Mohegan Tribe of Indians. The outlook is stable.

S&P said the ratings reflect high debt leverage, an active growth strategy, limited cash flow diversity and risks associated with potential gaming legislative changes in the Northeast, which could ultimately lead to increased competition.

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