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California Tribe Receives High Yield Bond Financing

Tribal Chairman Vincent Armenta says completion of the bond issue signals a new era for the tribe and for Native Americans in California. "We've worked hard to develop our business and this is a first step in achieving a new level of independence."

The Chumash tribe broke ground on the project in a ceremony on the tribal reservation after the bond issue was completed. The tribe's plans call for construction of a new 190,000-square-foot casino to replace its existing gaming facility and a new 105-room hotel on the tribe's 126-acre reservation located 35 miles north of Santa Barbara. Ground was broken for the new casino on July 15 and tribal leaders said the new casino building project is expected to be completed by November 2003. Completion of the hotel is expected by November 2004.

The bonds were issued following a two-week road show by Armenta, who said investment bankers approved the bonds after learning about the tribe's track record in operating its current gaming facility.

"Our casino has been operated efficiently and profitably for eight years and the fundamentals of the business we have built were impressive to investors," said Armenta. "We are gratified that the investment community has placed its confidence in our ability and in the soundness of lending to our tribe through the issuance of bonds."

During presentations to investors in half a dozen major U.S. cities, Armenta discussed the cash flow and operating fundamentals of the business, as well as other positive factors such no major competition for a 175-mile radius and the reputation of the area as a vacation destination. "These factors, taken together, reduce risk to bondholders," noted Armenta.

"The new gaming facility and hotel will benefit the community and will bolster the economy of the Santa Ynez Valley which depends on tourism as a primary source of income," he added. Santa Ynez Valley has a growing trend of tourists with a 6.8% average annual growth in hotel stays since 1993. In addition, 250-300 new jobs will be created as a result of the expanded casino and new hotel. The Chumash Casino, with its current employee base of 750, is already the largest employer in the Santa Ynez Valley.

The Santa Ynez Band of Mission Indians numbered nearly 10,000 during the Mission period in California and was recognized as a tribe by the federal government in 1901. Today the tribe has 158 enrolled members. The tribe operates its Chumash Casino on reservation land, which is held in trust by the U.S. Government and qualifies for Class III gaming under the Indian Gaming Regulatory Act.

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