- Details
- By Tribal Business News Staff
- Gaming
Mohegan Tribal Gaming Authority has issued $1.2 billion in secured notes as it undertakes a significant refinancing strategy, coming just months after losing operational control of its South Korean INSPIRE Entertainment Resort to Bain Capital.
The Connecticut-based tribal gaming enterprise announced Thursday that its wholly-owned subsidiary closed a private offering of $750 million in 8.250% first priority senior secured notes due 2030 and $450 million in 11.875% second priority senior secured notes due 2031.
These transactions represent a critical financial restructuring for Mohegan following a February takeover of its $1.6 billion INSPIRE venture by Boston-based Bain Capital, which seized control after accelerating a $275 million term loan.
Proceeds from the offering have been placed in escrow pending completion of additional transactions, including a private exchange with an investor to swap approximately $226 million of existing 13.25% senior unsecured notes for $250 million of the new second priority secured notes, according to a statement.
Mohegan also plans to enter a new five-year $250 million senior secured revolving credit facility with a banking syndicate — another condition for releasing the escrowed funds.
If all conditions are met by May 10, Mohegan will use the proceeds to redeem its outstanding 8.000% secured notes due 2026 and repay all loans under its previous revolving credit facility.
The refinancing effort comes amid serious financial challenges for the tribal enterprise. In fiscal year 2024, Mohegan reported record revenues of $1.9 billion but also posted a net loss of $235 million, with INSPIRE contributing significantly to those losses, according to prior Tribal Business News reporting.
Auditors had expressed "substantial doubt" about Mohegan's ability to continue as a going concern, citing significant debt maturities in 2025-2027 and covenant compliance issues with a term loan.
Despite these challenges, Mohegan continues to operate its core gaming portfolio, which includes resorts in Connecticut and Pennsylvania, alongside Canadian operations in Niagara Falls, Ontario. The tribal enterprise has also diversified through its iGaming division, Mohegan Digital, and ownership of the Connecticut Sun WNBA team.
