On December 11, 2014, Milbank assisted in the paramount $80M debt restructuring of the Pueblo of Pojoaque’s Buffalo Thunder Resort & Casino development project. Milbank represented the ad hoc committee of noteholders, Buffalo Thunder, Inc., in the restructuring of the original $240 million borrowed to build the Santa Fe based casino.
The bonds were borrowed at an interest rate of more than 9 percent, at a time of premier interest rates. When the Resort’s profits fell below expectations, the Pueblo of Pojoaque failed to make interest payments, forcing it into negotiation discussions with bondholders.
Unlike a corporate restructuring, the Pueblo of Pojoaque is part of a sovereign entity that falls under the Indian Gaming Regulatory Act. The debt holders are not entitled to liens on collateral or operations, so this restructuring agreement is unique to the Indian gaming industry. The restructuring has been in development since 2009, but in November 2010 the parties came to an agreement contingent upon the review of future cash flow and revenue. After a three year analysis, the deal was finalized this month. The restructuring agreement is based on their actual earnings for that period of time. The original bondholders received $112 million debt obligations at 11 percent, as well as a secondary debt of $48.9 million which is dependent on economic conditions. Buffalo Thunder Resort & Casino includes 61,000 square feet of casino space that includes 10 restaurants and 1,100 slot machines, a golf course, and 66,000 square feet of convention space. The Milbank team representing the Ad Hoc Committee was led by partner Brett Goldblatt (Corporate and Private Equity, LA); and included Russell Kestenbaum (Tax Partner, NY); Andrew Walker (Tax Partner, NY); Grace Darnsteadt (Corporate Associate, LA); Brian Stern (Corporate Associate, LA); and Mark Vible (Corporate Associate, LA).
