Approximately $244 million of rated debt affected
New York, May 08, 2013 -- Moody's Investors Service lowered Chukchansi Economic Development Authority's
("Chukchansi" or "the Authority") Probability of Default Rating ("PDR")
to D-PD from Caa2-PD and its Corporate Family Rating ("CFR")
to Ca from Caa2. Moody's also downgraded the Authority's 9.75%
senior notes due 2020 to Ca from Caa2. The ratings outlook remains
stable.
The rating action is as follows:
Corporate Family Rating to Ca from Caa2
Probability of Default Rating to D-PD from Caa2-PD
$244 million senior notes due 2020 to Ca (LGD4, 50%)
from Caa2 (LGD4, 50%)
RATINGS RATIONALE
The downgrade was prompted by the Authority's inability to make
the full interest payment due on the 9.75% senior notes
within the grace period, which expired on May 1, 2013.
Moody's understands that the Authority is currently seeking to enter
into a forbearance agreement with its lenders.
The stable rating outlook reflects the likelihood that the ratings will
remain at their current level given the ongoing Tribal dispute and uncertainty
over the ability and/or willingness of the Authority to make the past
due interest payment and future interest payments on the senior notes.
The ratings could be further downgraded and withdrawn in the event of
a negotiated restructuring with creditors.
While unlikely in the near term, positive rating pressure could
develop if the Authority makes timely interest payments, and materially
improves its liquidity profile and governance.
The principal methodology used in this rating was the Global Gaming Methodology
published in December 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Please see the Credit Policy page on www.moodys.com for
a copy of these methodologies.
The Chukchansi Economic Development Authority was formed in June 2001
as a wholly owned enterprise of the Picayune Rancheria of Chukchansi Indians,
a federally-recognized Indian tribe. Chukchansi has operated
since June 2003 the Chukchansi Gold Resort & Casino, a facility
located 35 miles north of Fresno, California. The facility
features a 404-room hotel, 1,806 class III slot machines,
approximately 40 class III table games and six restaurants.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Daniel Marx
Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Alexandra S. Parker
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's lowers Chukchansi's probability of default rating to D-PD