Case Studies

$39 million Senior Secured Credit Facility

Jena Band of Choctaw Indians

December 2016

Issue

  • The Jena Choctaw Pines Casino opened in February 2013, with the Construction Loan provided by a hedge fund at a very high interest rate
  • As the property’s performance began to stabilize in its second year, the Tribe hired TFA to refinance into a new deal

Outcome

  • TFA identified a strategy where certain development loans (subordinated to the Construction Loan) would be moved to the Tribal level, thereby making a new loan significantly more attractive, enabling significantly lower interest rates
  • TFA led an RFP process that resulted in a great outcome:  significant interest by banks, together with strong performance of the casino, enabled the Tribe to refinance both the Construction Loan and subordinated development loans into a low-cost bank loan
  • The Casino’s marginal interest rate reduced by more than 13% and weighted-average interest rate reduced by more than 10%
  • Distributions to the Tribe increased significantly

$35 million of Project Financing

Karuk Tribe

November 2016

Issue

  • Tribe was seeking project financing for a greenfield casino operation in Northern California
  • No existing casino operation or cash flow to support the transaction

Outcome

  • TFA ran an RFP process to bring in a project financing lender
  • Developed a creative solution, pairing a commercial bank and a Tribe
  • Overall cost of capital under 12% at close
  • No required management agreement, an often seen feature in tribal greenfield project financing transactions

Land Use Optimization Analysis

Pokagon Band of Potawatomi Indians/MNO-Bmadsen/Four Winds Casino

February 2016

Issue

  • The Band wanted to perform a detailed review of options for further development of their 660 acre reservation in New Buffalo Township, MI.  Sites to be considered would be those adjacent to and attached to their Four Winds Casino as well as development options for outer parcels proximate Interstate 94.

Outcome

  • Lead by TFACP partner organization The Hartmann Group, members of the team including TFACP, Keating Consulting, Newmark, Grubb, Knight & Frank and MFA worked between August 2015 and February 2016 on an extensive development plan.  Our final presentation was made to the Band, MNO, Four Winds management and the Band’s advisors in February 2016.

$63 million Senior Secured Credit Facility

Confederated Tribes of the Chehalis Reservation

December 2015

Issue

  • Tribe needed increase in existing credit line to fund ~$40 million expansion project at its Lucky Eagle Casino & Hotel.

Outcome

  • While the Tribe’s relationship with its long-time lender was very strong, through the process managed by TFA and its negotiating assistance, the Tribe was able to achieve over one million dollars in savings

$93 million Senior Secured Credit Facility

Pascua Yaqui Tribe of Arizona

September 2015

Issue

  • Refinancing of existing line of credit that was close to maturity

Outcome

  • TFA ran an RFP process to assist Tribe in selecting a lead lender and was advising them every step of the way through closing
  • TFA generated significant savings for the Tribe as compared to its expectations

$425-450 million of Project Financing

The Cowlitz Indian Tribe

Summer 2015

Issue

  • Tribe was about to embark on raising capital for one of the few remaining large-scale Native American greenfield casino developments.
  • They needed help analyzing, understanding and evaluating the best financing proposal among many highly complex proposals received

Outcome

  • TFA analyzed the proposals and guided the Tribe ;through its decision making process to select a Lead Arranger

$100 million Increase to Senior Secured Credit Facility

Seneca Gaming Corporation

April 2015

Issue

  • Seneca Gaming Corporation was seeking an incremental $100 million credit facility to partially fund an expansion project
  • Tribe had just closed on a $425 million senior secured credit facility the prior year
  • New competition that would compete in some parts of its markets had recently been announced

Outcome

  • Able to achieve increase without an increase to the pricing grid
  • One existing lender dissented and we were able to help find existing lenders to increase their share to cover the dissenting lender

$120 million Revolver

California Tribe

February 2014

Issue

  • Tribe had significant excess capacity on a revolving credit facility they had in place and did not fully understand how the facility worked

Outcome

  • TFA explained that the unused capacity was still accruing an unused fee and at the direction of Tribal Council, ran a RFP for a right-sized credit facility
  • This facility was provided entirely by a single lender, at a rate 50bps lower than they had originally pitched

$260 million Senior Notes and $245 million Senior Secured Credit Facility

California Tribe

August 2013

Issue

  • Tribe’s significant revenue share payments to state
  • Casino management agreement and expensive debt capitalization resulted in a strained credit and minimal distributions – only $6 million annually

Outcome

  • Helped negotiate an Amended Compact that drastically reduced revenue share payments and a favorable buyout of its management agreement
  • Enabled Tribe to achieve a debt structure that provided for significantly increased distribution capacity to over $24 million annually, interest savings and significant debt repayment – three major goals of the Tribe

$107 million Senior Secured Credit Facility

Quechan Tribe of the Fort Yuma Indian Reservation

August 2013

Issue

  • Existing financing at 15%; neither banks nor incumbent FA offering solutions

Outcome

  • TFA replaces previous FA
  • TFA runs an aggressive RFP
  • New financing closed at just above 3%
  • Savings to Tribe of over $40 million over the next 5 years

≈$200 million Syndicated Bank Credit Facility

Pacific Northwest Tribe

June 2013

Issue

  •  TFA brings idea to Tribe to refinance with an aggressive bank loan – no banks offer solutions

Outcome

  • TFA runs RFP and banks commit at less than 3% initial pricing vs. existing debt above 7%.
  • Savings of over $20 million over the next 5 years

$140 million Syndicated Bank Credit Facility

Pacific Northwest Tribe

August 2012

Issue

  • Maturity was driving need for new financing.
  • Tribe/finance staff thought they needed larger deal
  • Strong credit profile – banks pitching more than Tribe needed

Outcome

  • TFA guided to smaller deal size (even reducing our own fee in the process)
  • Eliminated required amortization
  • No distribution covenants, only subject to minimum liquidity
  • TFA negotiated out capex controls, minimum EBITDA covenant and construction covenants
  • Flexibility in deal is unprecedented in Indian Country.
  • Savings vs. original pitches from banks is significant

$66 million Syndicated Bank Credit Facility

Pauma Band of Mission Indians

February 2012

Issue

  • Covenant issues pending and need for casino refurbishment project financing
  • Incumbent banks wanted out and hedge funds at >20% were circling

Outcome

  • Refinanced all debt with new bank deal (vs. hedge funds)
  • Subordinated debt refinanced with regular bank loan
  • New blended debt cost was LESS than even prior loan rate by over 2.0%
  • New loan provided capital for capex project
  • Tribal distribution capacity increased 25% vs. existing deal
  • Savings vs hedge fund loan over $10 mm annually

$290 million Syndicated Bank Credit Facility

Northeast Tribe

May 2011

Issue

  • TFA brought Tribe the idea to refinance bonds with bank deal
  • No institution (bank or investment bank) ran the analysis to show the Nation the opportunity

Outcome

  • TFA runs competitive process to drive significantly lower fees and interest
  • Interest expense reduced by over $13 mm annually
  • New structure dramatically increased tribal distribution flexibility
  • TFA negotiated for a one-time distribution to Nation of over $40 million
  • New structure allows aggressive deleveraging and fully prepayable without penalty

$210 million Institutional Term Loan

Pacific Northwest Tribe

February 2011

Issue

  • Tribe sought reduced amortization vs. existing bank deal
  • Incumbent banks only pitching bond solution

Outcome

  • TFA introduced idea of term loan to Tribe
  • Negotiated better terms and structure resulting in over    $20 mm in value to the Tribe
  • Eliminated amendment fees
  • Negotiated lower transaction fees and expenses
  • First institutional term loan for a Native American borrower in over 7 years
  • Structure minimized required debt repayment but allowed repayment flexibility at Tribe’s option