California tribe issuing bonds to finance envisioned casino resort

In California, the Estom Yumeka Maidu tribe is reportedly due to issue some $440 million in collateral-backed bonds via its Enterprise Development Authority entity in order to finance the construction of a new 170-room casino resort.

According to a June 23 report from the Chico Enterprise-Record newspaper, the scheme for the planned Yuba County facility, which may be run by American casino operator, Hard Rock International, was revealed via a recent credit rating issued by financial services firm S&P Global Incorporated.

The evaluation reportedly explained that the Estom Yumeka Maidu additionally intends to utilize some $12 million from fresh subordinated loans in order to establish an interest reserve for the project to cover transactional expenses and pre-opening operating costs as well as the funding of its cage cash.

The Chico Enterprise-Record reported that the Estom Yumeka Maidu has been attempting to bring a casino resort to 40 acres of land it owns some five miles south of the city of Marysville since 2016 but has been delayed by multiple lawsuits. However, a federal appeals court recently threw out the latest of these with the tribe now hoping to open the envisioned property sometime late next year.

“We are moving ahead with preliminary steps to put the pieces together to get fully engaged in construction,” Estom Yumeka Maidu spokesperson, Charles Altekruse, reportedly told the newspaper. “We are hoping to make a big announcement in the near future.”

S&P Global Incorporated gave the Enterprise Development Authority scheme a ‘B’ credit rating before declaring that it would elevate this score by ‘one notch’ if the planned casino resort opens on time and fulfills initial operating expectations. It moreover purportedly stated that it was unlikely to downgrade this mark as the tribal concern has ‘sufficient sources of liquidity to cover interest for twelve months post-opening.’

“The positive outlook reflects our belief that the Enterprise Development Authority will open on schedule and generate solid levels of earnings before interest, tax, depreciation and amortization,” read the credit rating from S&P Global Incorporated. “We also believe the Enterprise Development Authority will generate discretionary cash flow in its first year, which it can use to begin paying down subordinated debt and will lead to an improvement in credit measures.”