S&P rates Mohegan Tribal notes CCC

Standard & Poor's said it affirmed the B- rating on Mohegan Tribal Gaming Authority.

The outlook is stable.

S&P also said it assigned a CCC rating to the authority's proposed $425 million senior notes due 2021.

The proceeds, along with borrowings under its bank credit facility, will be used to finance the repurchase or redemption of its outstanding 10½% third-lien senior secured notes due 2016.

The agency said it does not assign recovery ratings to Native American debt issues as there are sufficient uncertainties surrounding the exercise of creditor rights against a sovereign nation.

The notching of the ratings for issues offered by a Native American issuer reflects the relative position of each security in the capital structure, incorporating the amount of higher ranking debt ahead of each issue, S&P said.

The ratings consider the authority's weak business risk profile and highly leveraged financial risk profile, the agency said.

The authority has limited cash-flow diversity given its portfolio of two properties in two different gaming markets, S&P said, and significant longer-term competitive pressures that Mohegan Tribal will face at its Connecticut property as nearby states allow or expand gaming options.

The high quality of its properties somewhat offsets these factors, the agency said.

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