"The Santa Rosa (CA) Press Democrat published a story last week about the casino located in Sonoma County's Alexander Valley that was startling to most readers: the Dry Creek Pomo Tribe's River Rock Casino has to raise $205 million by November 1 to avoid default on $200 million in debt. The magnitude of this problem was underscored by the newspaper's report that the debt already is considered risky by Moody's Investors, which downgraded the casino's senior notes in August, with a concurrent public announcement that the downgrade was the product of delays in refinancing the debt issue.

Now, the tribe is down to only a few days before the November 1 deadline. Both Moody's and Standard & Poor's have issued warnings that the tribal debt almost certainly will again be downgraded if the refinancing is not concluded. The existing debt was issued in 2003 and pays 9.75 percent interest. The refinancing proposes a bond sale of notes that would mature in 2018, according to the Press Democrat, although there has been no public disclosure of terms, including interest rate.

The casino site is located on the Dry Creek Rancheria, a small federal fee tract of land located some seven miles east of U.S. Highway 101 at Geyserville. Visitors must drive a two-lane country road to reach the site, and then navigate a narrow, winding country road (now paved) up a steep hillside to the casino itself. Water supply and waste disposal have been problems in the past, although one of the project's worst problems was that the hill was unstable and a major "hillside stabilization project" had to be completed before major construction could be commenced. That project reportedly cost some $15 million at the time."

Get the Story:
Dennis J. Whittlesey: Another Tribal Casino Facing Financial Distress – This One May Have Been Its Own Worst Enemy (Mondaq.com 11/1)
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