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That is no secret, but I've never seen it quantified before.
The hard copy edition also contains a table not included in the online article that claims IoC's borrowing capacity was only $400M as of 10/23/05 with a debt to equity ratio of 4.81. Harrah's on the other hand had a $2.71B borrowing capacity with a 1.79 debt/equity ratio.
When Forest City/Harrah's take off the gloves this will be the crux of their argument.
IoC will have to raise much more than the $240M they did yesterday to get their balance sheet in order. They also will incur higher project costs to build a casino because their cost of borrowing funds will be at junk rates versus Harrah's lower borrowing costs.
It also raises the question of how much sense it makes for IoC to build the arena then give it to the SEA when they would incur such a high cost (junk grade debt) of borrowing funds. If this were done by the SEA though a dedicated annual slots fund, naming rights, and State $$$ to pay off municipal bonds the cost of the arena would be much lower.
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All good points... probably the best arguement for FC I've seen to date.
The only 'slight of hand' is the option of an SEA dedicated annual slots fund... That fund would need to be in excess of 10 - 12 million a year, and I haven't seen anyone make anything more than 'lipservice' to that proposal.
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