Mashantucket Pequot wraps swap offers, restructures $2.3 billion debt

By Susanna Moon

Chicago, July 1 - The Mashantucket Pequot Tribal Nation said it completed the offers to exchange notes and closed the restructuring of $2.3 billion of debt obligations.

The transactions, which represent the resolution of 100% of creditor claims, reduce the nation's debt outstanding by $550 million and extend maturities, according to a press release.

Foxwoods Resort Casino also received $25 million of new senior secured financing consisting of $5 million of revolving credit and a $20 million term loan.

The nation said on June 25 that it inked agreements with two holders of 8½% notes who had not tendered their notes in the exchange offers set to end at 11 a.m. ET on July 1.

Mashantucket Pequot agreed to purchase all of each holder's 8½% notes on the closing date of the restructuring of its debt obligations.

The holders owned $34,761,000 and $2 million aggregate principal amount of the 8½% notes, respectively, and Mashantucket Pequot agreed to purchase the notes for $9 million and $200,000, respectively, in cash at closing.

Mashantucket Pequot said it would fund the purchases of the 8½% notes from its collection account under its existing credit agreement.

After settlement on July 1, each of the required thresholds for the exchange offers will have been satisfied.

In the restructuring, the nation's senior secured credit facility and Kien Huat loans were restructured into two term loans with five- and seven-year maturities. Bondholders received new securities with lengthened maturities of 13, 18 and 23 years based on the seniority of the existing bonds.

The new money revolver and term loan each have a maturity of 30 months, the press release noted.

Modified provisions

The nation also said on June 25 that it modified provisions governing its investments set forth in proposed documents relating to the notes to be offered in exchange for outstanding special revenue obligations (SROs), subordinated special revenue obligations (SSROs) and 8½% notes under the offers.

Each indenture governing the new notes will be modified from the versions included as exhibits to the exchange offers to revise a covenant to permit additional investments in an aggregate outstanding amount not to exceed $10 million.

Additionally, the collateral trust, security, intercreditor and subordination agreement will be modified from the version included as an exhibit to the exchange offers to revise a definition to permit investments of up to $25 million made in connection with the application for a gaming license in the Catskills, N.Y., and the subsequent development, construction and management of a resort casino and associated amenities if the investments must be made within five years of closing and the Mashantucket Pequot Gaming Enterprise is limited to an aggregate investment of $5 million before a gaming license is awarded.

More on exchange offers

As of 5 p.m. ET on June 5, holders had tendered all $477.9 million of the nation's special revenue obligation bonds, $365.95 million, or 99.97%, of its subordinated special revenue obligation bonds and $463,164,000, or 92.63%, of its 8½% notes. The totals remain unchanged from March 13.

As of 5 p.m. ET on June 5, lenders holding all of the issuer's bank loans had agreed to exchange the debt for new loans, according to Bank of America, NA as the administrative agent. Lenders holding $509,557,833, or 96.26%, had agreed to exchange as of May 15.

In order to complete the exchange, Mashantucket Pequot previously said it must meet various conditions. One condition, receipt of a declination letter from the National Indian Gaming Commission, was satisfied on April 5.

The exchange offers began on Feb. 13 as part of a debt restructuring support agreement.

The payment to holders in the offers are set forth in the table below.

Epiq Systems is the exchange and information agent.

Mashantucket Pequot owns the Foxwoods Resort Casino and is based in Mashantucket, Conn. The Mashantucket Pequots are a native Algonquin people in southeastern Connecticut.

Notes New notes Par amount

1997 series A special revenue bonds due 2012 SROs $1,289.83

1998 series A special revenue bonds due 2013 SROs $1,281.20

2005 series A special revenue bonds due 2021 SROs $1,269.51

1997 series B subordinated special revenue bonds due 2012 SSROs $821.96

1997 series B subordinated special revenue bonds due 2018 SSROs $822.19

1997 series B subordinated special revenue bonds due 2027 SSROs $822.19

1999 series A subordinated special revenue bonds due 2028 SSROs $841.59

1999 series B subordinated special revenue bonds due 2010 SSROs $797.51

1999 series B subordinated special revenue bonds due 2011 SSROs $778.55

1999 series B subordinated special revenue bonds due 2012 SSROs $738.21

1999 series B subordinated special revenue bonds due 2013 SSROs $698.60

1999 series B subordinated special revenue bonds due 2014 SSROs $659.84

1999 series B subordinated special revenue bonds due 2015 SSROs $622.01

1999 series B subordinated special revenue bonds due 2016 SSROs $586.75

1999 series B subordinated special revenue bonds due 2017 SSROs $552.96

1999 series B subordinated special revenue bonds due 2018 SSROs $520.60

2006 series B subordinated special revenue bonds due 2036 SSROs $864.79

2007 series A subordinated special revenue bonds due 2031 SSROs $877.38

2007 series A subordinated special revenue bonds due 2034 SSROs $867.94

8½% notes due 2015 Notes $435.38

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