Shingle Springs Band could see upgrades over gaming debt

The Shingle Springs Band of Miwok Indians of California could see an upgrade in its credit rating thanks to a new Class III gaming compact and a restructuring of existing debt.

Moody's Investors Service previously assigned a "Caa2-PD Probability of Default Rating" on $450 million in debt. The poor rating came in response to lower than expected returns from the Red Hawk Casino.

But the new compact lowers the revenue sharing rate and paves the way for refinancing of the debt. As a result, Moody's said it will review the rating for a possible upgrade.

Moody's, however, warned that Red Hawk faces competition from the Federated Indians of Graton Rancheria. The $800 million Graton Resort and Casino is expected to open later this year.

"The review for possible upgrade considers Moody's view that the proposed refinancing will provide Shingle Springs with a more relaxed debt maturity schedule, improved free cash flow and financial flexibility as the Authority faces increased competition in the near-term," Pete Trombetta, an analyst at Moody's, said in a press release.

Get the Story:
Press Release: Moody's places Shingle Springs' ratings on review for upgrade; assigns ratings to proposed bank facility and senior notes (Moody's Investor Service 8/6)

Federal Register Notice:
Indian Gaming (July 23, 2013)

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