River Rock Entertainment pulls plug on tender for 9¾% notes, blames credit market conditions

New York, Oct. 1 - River Rock Entertainment Authority abandoned its tender offer for $30 million of its 9¾% senior notes due 2011.

The issuer said the tender was conditional on financing which cannot be completed due to the current disruptions in the credit markets. Other planned transactions will be postponed until conditions improve.

All $172.1 million of tendered notes will be returned.

In its previous announcement on Sept. 24, River Rock Entertainment extended the tender offer to 5 p.m. ET on Oct. 2.

The company previously said it received tenders of $149.9 million principal amount of its 9¾% notes by the early tender deadline, far more than the maximum size of the offer.

As of 5 p.m. ET on Sept. 24, holders had tendered $172.1 million of the notes.

At its previous announcement on Sept. 10, the authority extended the early tender deadline to 5 p.m. ET on Sept. 16 from Sept. 10.

River Rock began the offer on Aug. 27 and said it would purchase up to $30 million principal amount of the notes.

The authority was offering $1,051.25 per $1,000 principal amount of the notes, including a $30.00 early tender premium.

River Rock would only have paid the early tender premium to holders who tender by the early deadline.

The offer was originally scheduled to end on Sept. 24.

Holders would also have received accrued interest up to but excluding the settlement date, at the time expected to be Oct. 3, pushed back from Sept. 25.

Because more than $30 million of notes were tendered, the authority would have accepted securities on a pro rata basis.

The tender was to be one of a series of transactions intended to provide funds for all or some capital improvements projects on the Dry Creek Rancheria Band of Pomo Indians' trust and adjacent lands that serve essential governmental purposes, including road, drainage and landscaping infrastructure projects, design and engineering services, land purchase and the repurchase of notes previously issued to finance the projects.

Most of the projects are required to make the current operations more efficient and improve services to the tribe's reservation and its gaming and entertainment facility.

The transactions would have allowed the tribe to complete part of the preparatory site work for its proposed resort development project, including a new and expanded Tuscan-themed casino and hotel with luxury resort amenities.

The required $84.8 million of financing was to come from cash on hand, a new $20 million 9¾% unsecured term loan due Nov. 1, 2011 and other debt. The loan had the ability to be increased by $5 million. It was also to be exchangeable for notes.

Merrill Lynch & Co. is dealer manager (888 654-8637). Global Bondholder Services Corp. is depositary and information agent (866 794-2200).

River Rock Entertainment is a Geyserville, Calif., casino operator controlled by the Dry Creek Rancheria Band of Pomo Indians.

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