The Mohegan Tribal Gaming Authority has finalized a major financial restructuring, closing a series of refinancing transactions to improve its capital structure and liquidity following its recent loss of operational control at Korea’s INSPIRE Entertainment Resort.
On April 24th Mohegan and its wholly owned subsidiary MS Digital Entertainment Holdings, LLC assumed responsibility for $1.2 billion in secured notes originally issued by Mohegan Escrow Issuer, LLC on April 10th.
The issuance included $750 million in first priority senior secured notes due 2030 and $450 million in second priority senior secured notes due 2031.
Alongside the release of the notes, Mohegan entered into a new five-year, $250 million senior secured revolving credit facility.
Proceeds from the offering, borrowings under the new facility, and existing cash were used to redeem the Company’s outstanding 8 percent secured notes due 2026, repay all borrowings under the previous revolver, and cover associated fees and expenses.
As part of the restructuring, Mohegan completed a private exchange with an investor, trading approximately $226 million of its 13.25 percent senior unsecured notes due 2027 for $250 million in new 2031 notes.
The investor also agreed to swap an additional $90 million in 2027 notes for newly issued 13.25 percent senior unsecured notes due 2029, extending maturity by at least one year beyond the escrow release requirement of 2028.
In a parallel transaction, the Mohegan Tribe of Indians of Connecticut acquired $100 million of the 2027 notes and exchanged them for new 13.25 percent senior unsecured notes due 2032, further enhancing the Company’s long-term debt maturity profile.
“The Mohegan Tribe is thrilled to make this investment into notes of Mohegan, providing the Company with extended maturity runway and financial flexibility,” said James Gessner Jr., Chairman of the Tribe. “This is a clear demonstration of our unwavering commitment to the success of Mohegan and strengthens our alignment with investors.”
Ari Glazer, CFO of Mohegan added in the announcement that the transactions helped the company create substantial financial flexibility.
“Mohegan will have no material debt maturities for the next four years. We will continue to prudently manage our capital structure to reduce leverage, improve borrowing costs, and create greater strategic flexibility for years to come”, Glazer noted.
The refinancing follows Mohegan’s loss of control over the $1.6 billion INSPIRE Entertainment Resort in Incheon, South Korea, after defaulting on a $275 million Korea Term Loan.
Although the Company attributed the default to missed financial targets rather than missed payments, creditor negotiations collapsed. In February, Bain Capital exercised remedies including the appropriation of shares in MGE Korea Ltd., the resort’s parent company.
Despite the operational setback, INSPIRE has reported promising performance metrics. Its non-gaming operations opened in November 2023, with its foreigner-only casino launching in February 2024. The property generated $63.5 million in net revenue in 4Q24.
