Pokagon Gaming $305 million eight-year notes talked at 10½%, to price Thursday

By Paul Deckelman

New York, June 14 - Pre-deal market price talk emerged Wednesday for Pokagon Gaming Authority's upcoming $305 million eight-year senior notes, with high-yield syndicate sources expecting that it will price to yield around 10½%.

The deal is expected to come to market Thursday via book-running manager Banc of America Securities LLC, with books closing at noon ET and pricing expected late in the afternoon.

The Rule 144A offering, which is non-callable for the first four years after issue, has been marketed to prospective investors via a roadshow that began last Wednesday.

Pokagon Gaming Authority is a Native American gaming company operated by the Pokagon Band of the Potawatomi Indians of New Buffalo Township, Michigan, located in the southern part of the state near Lake Michigan, not far from the Indiana border, about 45 miles east of Chicago and 215 miles southwest of Detroit. The tribe is the latest in a lengthy list of Native American groups to access the junk bond market over the past several years to fund start-up gaming operations.

Proceeds from the new deal will help fund costs associated with designing, developing, constructing, equipping and opening the tribe's Four Winds Casino and Resort, on a 675-acre site off I-94, near the city of New Buffalo. Ground was scheduled to be broken on the project this month after six years of planning and much controversy. Environmentalists challenged the project's impact on the surrounding area, but a federal appeals court ruling in January removed the final obstacle.

The project is expected to create 1,000 construction jobs, and the casino resort - expected to be open for business early next year - is expected to create 2,000 positions.

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