Mohegan Tribal Gaming Authority’s former South Korea project INSPIRE has refinanced its construction debt, removing a $100 million credit enhancement obligation and easing a long‑standing overhang on the group’s bonds, CBRE Credit Research said.
The refinancing, confirmed by management on the latest earnings call, means no cash outflows were required from Mohegan’s restricted group, analysts noted.
‘Contractual support of the Korea entity has been an overhang on the credit since last year’s ownership change […] this should be viewed positively’, CBRE said in the dispatch, reiterating Outperform ratings on the company’s first and second lien notes.
Bain Capital, an American private investment firm based in Boston, exercised its acquisition rights for INSPIRE’s parent firm MGE Korea Limited in February.
In its recent third-quarter financial report, Mohegan said lenders led by Bain Capital seized control of its former South Korean resort vehicle on February 13th, triggering the deconsolidation of the business and a shift to discontinued operations across prior periods.
The move generated a $77.6 million gain on disposal and recognition of $137 million in estimated guarantee liabilities tied to the project. The company no longer holds equity in INSPIRE or its parent entities and will not benefit from the resort’s performance.
Mohegan’s bonds remain attractive relative to peers, with leverage at 5.2 times and spreads offering more than 100 basis points per turn compared to other high‑yield gaming issuers, CBRE added.
CBRE also highlighted strong growth in Mohegan’s digital segment, with EBITDA up 29 percent year‑on‑year in the quarter, and said concerns about cannibalization from potential New York casino licenses were limited.
Mohegan’s balance sheet ‘is in the best shape it has been for quite some time,’ CBRE said, pointing to reduced Korea risks and continued digital momentum as key supports for its credit profile.
In its recent fiscal 2025 annual report, Mohegan highlighted that ‘Discussions with Bain Capital are ongoing with respect to resolution of the Company’s and its subsidiaries’ ongoing connections to Mohegan INSPIRE, Inspire, MGE Korea Limited, and their creditors, including with respect to the full transition over time of the duties of the Company’s subsidiaries under a management agreement with respect to Mohegan INSPIRE entered into in 2021. Until such transition is completed, certain of the Company’s subsidiaries may continue to provide certain services to Inspire’.
