The Seminole Tribe of Florida announced earlier this week that it secured a new seven-year, $750 million loan. They'll use the money to pay off an existing loan that was set to mature in 2014.
Those who follow the tribe's finances say the loan indicates the tribe is optimistic about its future and anticipates continued strong revenues: Experts estimate the tribe takes in about $2 billion a year from its gambling operations.
Standard & Poor’s and Fitch Ratings assigned a BBB-rating to the agreement and Moody’s assigned a Baa3 rating.
Fitch Ratings overall has upgraded its outlook on the tribe from stable to positive.
“This primarily reflects our increased comfort with the tribe's governance and fiscal management since we downgraded STOF out of investment grade in 2010 following a Notice of Violation from National Indian Gaming Commission. Since the NOV the tribe took measures to correct the violations related to the NOV,” a Fitch statement read.
They also like the extension of the gaming division management's employment contracts, including the retention of CEO James Allen through 2018.
The tribe’s agreement with the state to operate table games expires in July 2015, and Fitch notes a failure to extend table games past 2015 would be a negative because table games account for 17 percent of tribal gambling revenue. But some of that would be offset by no compact revenue share payments, which is about 12 percent of their revenues now.
Revenues were up 4 percent in fiscal 2012, and Seminole management mentioned that January 2013 revenues remained strong but saw a softening in February because of higher gas prices and the increased payroll tax, Fitch said.
Greenberg Traurig, LLP and Eric Dorsky P.A. served as counsel to the tribe. That included shareholders Marlon Goldstein, Lorne Cantor and Burt Bruton from the Miami office, Cindy Davis from Atlanta and associates Evan Kanter from Miami and Buddy Meyer (Atlanta).
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