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Trump Taj Mahal closing adds to Atlantic City's fiscal pain, Wall Street agency says

Friday, August 12, 2016   (0 Comments)
Share | 08/12/16

A Wall Street credit rating agency said Thursday that a recent loan from the state will be a boost to financially struggling Atlantic City — but the impending closing of the Trump Taj Mahal casino could provide more pain.

Moody's Investors Service said the state's $73 million loan should give the seaside gambling resort the time it needs to formulate a five-year financial plan to avoid a state takeover. Without the loan, the agency said, there was "a high probability" the city would have defaulted on its debt within the next few months.

Though Moody's said Atlantic City's bond rating remains in junk status, the loan is a "credit positive" for the city. Still, the agency said the city's "financial position remains dire given its dependence on a shrinking casino industry."

That, Moody's said, is reflected by the announcement that the Taj Mahal is set to close its doors Oct. 10 amid a month-long worker strike.  The Taj will be the fifth Atlantic City gambling hall to shutter in two years. The casino has notified government officials that more than 2,800 workers will be laid off. 

Moody's added that it expects the city's remaining casinos to "capture a portion" of the Taj's revenue, but gambling revenue across the city is "likely to decline."Plus, the agency noted, that could also have a "knock-down effect" on the city's new program to have casinos make payments in lieu of taxes.

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