High-Yield Muni Deal for Resorts World Catskills Stalls
While most of the casino-related drama in New York is unfolding in the lower part of the state, there’s a high-stakes saga unfolding upstate, too.
A $561 million municipal bond deal tied to a Catskills casino has been put on ice, pausing a transaction that would reshape ownership of the resort’s non-gaming assets, Bloomberg reported. The unrated, high-yield bonds were set to price Aug. 27 under the management of KeyBanc Capital Markets.
Instead, the offering was pulled at the last minute as investors pushed to hire legal counsel — known in muni markets as purchaser’s counsel — before moving forward.
The resort features two hotels, a golf course, a spa and fitness center, multiple restaurants, conference space and event space.
Proceeds from the deal are earmarked for Genting Group’s Resorts World Catskills in Monticello, New York, where the hospitality arm plans to buy up the land beneath the resort, retire looming debt and cement a long-term management contract. The bonds would be issued through the Sullivan County Resort Facilities Local Development Corp., a not-for-profit entity created under state economic development law.
Resorts World rents its site from a real estate investment trust. Taking control of the land would give the operator more flexibility to manage its capital stack, including paying off a balloon payment due next year.
A spokesperson for the casino declined to comment on the delay. Representatives for KeyBanc and the development group also stayed mum.
Resorts World Catskills opened in 2018 as an economic engine for tourism in the area. But the resort quickly failed to generate enough cash to cover expenses, according to a report from the Empire Resorts REIT.
Revenue could be further imperiled by the arrival of downstate casinos. A report from the county estimated the Catskills resort could lose 26 percent of gross gaming revenue if one casino opens in New York City and up to 76 percent of multiple casinos open their doors.
Genting is one of the companies vying for a downstate casino license, planning a $5 billion expansion of its facilities at the Aqueduct Racetrack in Jamaica, Queens.
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