Funding sources for the Quechan Indian Tribe's new casino resort west of Yuma have been downgraded to junk bond status, and officials for a financial ratings company say the tribe faces the possibility of default if it cannot secure $25 million in private funding.

  A global credit squeeze led Fitch Ratings to downgrade $155 million in bonds issued for the new casino and report that the tribe is likely to be in jeopardy of default if it cannot gain the final $25 million of a $214 million project.

  A Business Wire report read that "due to adverse market conditions, the tribe has not been able to secure the financing externally. As a result, a project fund deficiency is occurring under the gaming enterprise bond indenture."

  Quechan President Mike Jackson said Tuesday the tribe would be able to secure funding by Friday and that "there's not going to be any stopping it."

 "We have our own resources," Jackson said. "Yes, the economy is bad and there is a big slowdown and the bonds issue is there. Our rating went down. But we are working on getting the money ourselves."

  Jackson said he could not expand upon from where funding would come.

  Fitch downgraded a $45 million 2007 series and a $110 million 2008 series to CCC and CCC+, respectively. Both grades are considered junk bond status. Their former ratings were a solid B+ and BB-, respectively.

  "The downgrade ... to the CCC category reflects Fitch's view that a real possibility of payment default exists at this time," the rating agency said in a release. A downgrade to CC "would reflect Fitch's view that a payment default has become probable," the agency said.

  The initial $25 million deficiency from tribal funds was covered by a $4.2 million payment of tribal monies last week. But the tribe might not be able to meet reserve requirements of the bonds if that continues.

  Covenants of the government project bond state that the tribe must maintain an unrestricted net asset balance equal to at least 125 percent of the principal amount of long-term indebtedness that is outstanding and does not have a security interest in the cash flows of the casino operation.

  That means monies that must be maintained at the casinos for gambling purposes cannot count toward the percentage. Casinos must house certain levels of money depending on their gaming operations.

  To cure the project funding ills, the tribe must "either deposit $25 million in the project fund, or must fund the deficiency amount of $25 million in six equal monthly installments of $4.2 million," the report read.

  The tribe has elected to begin to fund the deficiency over six months while still trying to secure external financing. The first monthly installment of $4.2 million was made last week with tribal government funds.

  If the project fund deficiency does not continue to be remedied on a timely basis, the report read, there is potential for disruption of project construction as distributions from the project fund to the contractor could be delayed.

  The new resort, at 297,000 square feet, will house 166 hotel rooms and 990 slot machines. It will replace the existing California casino located on the California-Arizona border. It will also contain the area's largest convention center just off Interstate 8 on Algodones Road.

  Jackson estimated the casino at 60 percent complete. The tribe is looking at opening just after the new year. He said that was ahead of schedule and would have been even further ahead if other gaming tribes had not opposed the resort.

  Other tribes are facing similar funding issues. The Dry Creek Pomo tribe in Alexander Valley, Calif. announced plans in January finance $600 million to pay off debt and build a resort beside River Rock Casino. But lower casino revenues and less liquid money within credit loaners has shelved the plans. The tribe hopes to raise money in smaller amounts.