Company that owns Twin River gets ‘junk bond’ status amidst bankruptcy concerns

Call Staff Reports

PROVIDENCE — Amid concern about a “potential bankruptcy filing,” the Twin River racetrack/casino has seen its credit rating dropped for the second time this month by Standard & Poor’s Ratings Serivces.
On Friday the ratings of UTGR Inc., the company that owns Twin River, tumbled three levels to CCC-, or “junk” status in the slang of high finance, according to a press release issued on Friday. The company remains on S&P’s CreditWatch, where it was placed on March 4, the day its rating was first dropped, from B+ to B-.

"The downgrade reflects our ongoing concerns about a potential bankruptcy filing as the company reportedly continues to negotiate a forbearance agreement with its lenders,” said Ben Bubeck, Standard & Poor’s credit analyst. “While we believe that incentives exist for the company and its lenders to reach an extended agreement, the new ratings better reflect the near-term risk factors for a potential bankruptcy filing if the parties are not able to come to an agreement.”
A Twin River spokeswoman did not return messages seeking comment on Friday.
Twin River’s finances have been in the news since the company missed a payment to its lenders earlier this month. UTGR worked out a 10-day forbearance agreement with the creditors, which it reportedly extended for another week on Friday while the two sides try to negotiate a solution to what Twin River Spokeswoman Patty Doyle called “a temporary cash-flow issue.”
According to Doyle, January revenue at Twin River was up 29 percent over January 2007 and in February, the facility did even better, increasing its performance over the same month last year by 42 percent.
UTGR owes money to large financial institutions as a result of its $435 million purchase of the then-Lincoln Park in 2005 and the $225 million it has spent on renovations since the purchase.
In resolving the CreditWatch listing, Standard & Poor’s press release stated, “we will assess the terms of any agreement that the company establishes with its lenders, including the time frame for which it provides liquidity-related relief. In addition, we will continue to monitor management’s efforts to improve operating performance at the property.”
In the meantime, the general contractor that oversaw $225 million in renovations to the gambling emporium, Dimeo Construction, and two subcontractors, have filed liens against the Old Louisquisset Pike property to secure debts they say have not been paid. Dimeo claims an unpaid debt of more than $6 million and the two subcontractors, Arden Engineering of Pawtucket ($635,000) and Legere Group of Avon, Conn., ($195,000) say they are owed nearly a million more.
Both Twin River and Newport Grand are lobbying to remain open 24 hours, either seven days a week, or just on Friday and Saturday nights and the Sundays that fall before state and federal holidays, depending on which of several bills that have been introduced on the subject you are reading.
Some legislators are pushing for the extended hours as way to bring in more revenue to the state at a time when the state budget is awash in approximately a half-billion dollars of red ink. The state takes the first 61 cents of every dollar in net terminal income Twin River receives.