The Mohegan Tribal Gaming Authority has confirmed the issue of $1.2 billion in new secured notes as part of a wider strategy of refinancing.
The move is aimed to provide stability amid ongoing challenges from upcoming debt maturities as well as to improve liquidity. A private note exchange and a fresh credit agreement are prerequisites to the deal going through, with the funds placed in escrow.
The refinancing update comes after Mohegan experienced financial pressure linked to the tribe’s South Korean venture.
In February this year, Bain Capital assumed operational control of the Inspire Entertainment Resort in Incheon, citing missed financial covenant thresholds.
Mohegan is contesting certain aspects of the takeover, while negotiations remain ongoing.
.@CBRE Investment Banking acted as financial advisor to Mohegan Tribal Gaming Authority in connection to the issuance of the $1.2 billion two-part refinancing of 1Lien/2Lien senior secured notes. pic.twitter.com/XfTQ00xJo6
— CBRE Capital Markets (@cbrecapitalmkts) March 31, 2025
Terms of the transaction
The tribal operator had previously intimated that refinancing would be required to meet operational needs as well as debt obligations, so the update is not unexpected.
Its Q1 2025 financial briefing indicated liquidity concerns without the emergence of fresh capital, so the financing is timely and adequate for the current situation.
Yesterday (April 10), Mohegan Escrow Issuer – a fully owned subsidiary of the parent company – concluded a private offering of $750m in 8.25% of first priority senior secured notes due in 2030 with a further $450m in 11.875% second priority senior secured notes due in 2031.
The transaction’s terms state the release of escrowed funds is conditional upon the completion of a private exchange between Mohegan and its co-issuer, MS Digital Entertainment Holdings, to exchange $226m in 13.25% senior unsecured notes due in 2027 in return for $250m of the newly issued 2031 notes.
Another condition is the setup of a new five-year, $250m senior secured revolving credit facility with different banks in a syndicate arrangement.
The new notes will be subject to redemption on 10 May, if the escrow conditions are not met by that date.
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