New York-based Moody’s Investors Services downgraded the credit rating for the operators of the Mohegan Sun resort casino in Uncasville because of concerns of $925 million in current debt obligations.
The default rating fell to Caa3 from Caa2 and all long-term debt ratings moved to a negative outlook because the Mohegan Tribal Gaming Authority has not yet refinanced $675 million in credit to expire in March and $250 million in notes that mature in April.
The negative rating was fueled further by the Mohegans significant debt leverage, continued weak consumer demands for gaming, and the looming threat of legalized gambling in Massachusetts, which would siphon players from the Connecticut casino.
The Connecticut casino has seen steadily dropping gaming revenues since the mid-2000s and laid off 300 employees in September.
The tribal authority also operates a casino in Pennsylvania and plans to complete another one in the Catskills region of New York by 2013. The Mohegans are considered the frontrunners for a Western Massachusetts casino license if that state ever approves gambling.
