Trump makes deal with tribe in Connecticut

Tuesday, March 28, 2000 | 10:53 a.m.

Trump Hotels & Casino Resorts Inc. announced Monday it reached a pact to develop and manage a tribal casino in southeastern Connecticut.

The deal between Trump and the Paucatuck Eastern Pequot Tribal Nation is subject to approvals by the Bureau of Indian Affairs and the National Indian Gaming Commission.

The tribe has yet to be formally recognized by the federal government. However, the BIA published a positive preliminary report Friday on the tribe's petition to the federal government for recognition, and Trump officials say they're optimistic full recognition could come within six months.

It is the second tribal casino announcement by Trump this month. On March 8 Trump announced plans to partner with the Twenty-nine Palms Band of Mission Indians on a $60 million casino expansion near Palm Springs.

Meanwhile, analysts said Monday that cash flow from Trump's riverboat casino in Indiana isn't strong enough to cover its debt load.

Analysts told Bloomberg News that this will probably force company Chairman Donald Trump to either repay a $26 million personal loan from the company, or negotiate new terms of bondholders.

The Indiana casino has had difficulty competing with more liberal boarding rules in Illinois, and an $11 million interest payment will come due in June. In the past, Trump has diverted cash from his Atlantic City properties to cover the Indiana debt. But the terms of his bonds will prevent Trump from diverting any more cash flow from Atlantic City, analysts say.

Trump is expected to repay his personal loan from the company rather than risk default. Fortune magazine has reported Trump is trying to mortgage his estate in Palm Beach, Fla., in an attempt to repay the loan.

Standard & Poor's rates Trump's bonds "CCC+," indicating a vulnerability to default.