Buena Vista Rancheria Finances California Casino with High Yield Bond

Buena Vista Rancheria Finances California Casino with High Yield Bond. If you are an avid casino gambler looking for a real money gambling opportunity, then investing in a Native American tribe in California must just fit the bill. In a recent post on Nasdaq.com provided by Reuters, Davide Scigliuzzo goes on to explain how the Me-Wuk Indians have upped the ante on building a new casino with a junk bond investment yielding a return of close to 15 percent.

When Will Buena Vista Rancheria Finance California Casinos?

Buena Vista Rancheria of Me-Wuk Tribe has been trying to put together a plan to build a California casino in Amador County for the last ten years. Things may finally be in place from an investment standpoint following last week’s sale of a $250 million five-year bond. In the report, it is noted by ICE Bank of America Merrill Lynch data that the actual yield on this secured bond offering is 14.425%. Above all, this compares to an average 6.28% yield on US junk bonds.

Riskiest Borrowers Rated Triple C

Also in the information from ICE BAML is data that shows that even the riskiest borrowers rated Triple C or lower are paying an average yield of 10.39% on these types of investments. This specific Buena Vista offering is rated Caa1/B- Scigliuzzo goes on to add, ‘the bond was issued at a deep discount of 95 cents on the dollar. Also, this allows the tribe to keep the coupon at 13%. The capital structure also includes $16 million of subordinated payment-in-kind debt, according to S&P’.

Last Year Native American Indian Tribe Offer 12% For US Junk Bond Market?

Over a year ago, the tribe tried to raise funds through a similar offering that offered a 12% return. Most importantly, this was their first attempt to use the US junk bond market as a means of financing the project. It is common for bond investors to look for higher returns on debt issues from Native American tribes in the casino business. There is the lingering concern of protecting creditors rights in these situations if the tribe goes into bankruptcy.

The Quapaw Tribe of Oklahoma and the Downtown Development Authority

The report cites a situation with the Quapaw Tribe of Oklahoma and the Downtown Development Authority as owners and operators of a real money casino. Earlier this year, they paid a yield of 10.759% to sell a $265 million five-year bond. The main goal of this offering was to refinance existing debt. This plan also ran into some issues from junk bond investors when it was first offered in 2016.

The Competition From Existing California Casinos Are Hurting The Deal

Competition from existing and planned California casinos in a 100-mile radius are also clouding this deal. This report of market conditions was provided by analysts at Moody’s and S&P. They went onto add that branding and other marketing agreements with casino gaming giant Caesars Entertainment should go a long way towards easing these concerns. The new casino will operate under the name Harrah’s NorCal.

What High Bond Yield Percentage Will Buena Vista Rancheria Finance The California Casino?

With the financing in place, the report cites a target opening date of this new casino sometime in late spring of 2019. The whole project has a construction time frame of 13 months. The overall size of this casino will be more than 70,000 square feet.

The Me-Wuk Indians of California owns the Buena Vista Racheria. For over a decade, they have planned on building a casino resort in Amador Country. However, in mid-2018 another Native Amerian Indian Tribe sells the Me-Wuk Indians of California a five-year bond for over two hundred million dollars.

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