Reno, Nev (KRNV & MyNews4.com) -- The company that owns the Silver Legacy, Eldorado and Circus Circus casinos, is in major debt, according to an auditing firm.
The audit was done by the firm, Deloitte & Touche, LLP. And while it may not seem alarming for a casino to carry debt in this day and age, what does appear alarming is the size of it, and what the report says about the Silver Legacy's potential ability to pay it off.
In the 17 page audit, the firm lays out financial reports for 2008, 2009 and 2010... for The Silver Legacy, The Eldorado, and the Circus Circus in downtown Reno.
The audit is filled with tons of numbers, but the ones which stand out are the ones included in the firm's report in the "liquidity" section.
In that, it states the company has $142.8 million in outstanding mortage notes, and that the entire principal is due on March 1, 2012... That due date is just three weeks away.
So what will the Silver Legacy do about this debt which is due so soon? We attempted all day Wednesday to get a comment from the casino, but that comment never came.
Then I checked with Moody's Credit Services, and got a clearer picture of the Company's plan. Moody's states that the Silver Legacy plans to refinance that $142.8 million in secured notes.
But this audit report casts doubt on how easy that will be. The report states, "there can be no assurance... the Partnership will be able to refinance... on terms that are acceptable to the Partnership... or the holders of the notes..."
The report goes on to say the creditors could be entitled to "exercise remedies... including foreclosing on assets... or the creditors may be "motivated to institute bankruptcy proceedings."
Again, no comment from the Silver Legacy Wednesday even after repeated attempts, but according to this audit and Moody's credit services, it appears they will try to refinance that major debt. Moody's has indicated that the company's credit rating will be downgraded.
