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Trump Entertainment Unable to Meet Payment Obligations
ATLANTIC CITY, NEW JERSEY --
After months of wondering which casino empire would be the first to crack under the weight of its significant debt, it appears the answer is Trump Entertainment. While observers have carefully watched MGM Mirage and Las Vegas Sands as they fought to meet credit covenants and retain sufficient liquidity to finish such projects as MGM 's CityCenter, Trump announced today that it will miss a $53.1 million bond interest payment Monday, December 1st.
Trump representatives said the move was necessary to keep enough liquidity to keep the company afloat. They stated a thirty-day grace period would be used to search for financing to restructure debt and the company's overall capital structure. But no guarantee was forthcoming that such a deal was close at hand.
Atlantic City casinos have suffered double-digit declines in revenue in back-to-back months, the worst turn for business since gambling was legalized in New Jersey. Trump Entertainment shares have dropped from $5.70 a year ago to $0.31 today.
In the third quarter of 2007, Trump posted a net profit of $6.6 million, or 21 cents a share. This year, those numbers were a net loss of $139.1 million, or $.39 per share.
Trump Entertainment was created in 2005 in a bankruptcy restructuring.
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