Mohegan secures $1.2bn in note offerings as part of refinancing strategy
Proceeds placed in escrow pending completion of private exchange and new credit facility.
Key points:
– Mohegan issues $1.2bn in secured notes through wholly owned subsidiary Mohegan Escrow Issuer
– Proceeds are conditional on a private exchange and new $250m senior secured revolving credit facility
– Funds intended to redeem 2026 notes and repay loans from existing revolving credit agreement
Mohegan Tribal Gaming Authority has announced the issuance of $1.2bn in new secured notes as part of a broader refinancing strategy designed to address upcoming debt maturities and improve liquidity.
The proceeds have been placed in escrow and are contingent on the completion of additional financing steps, including a private note exchange and a new credit agreement.
On 10 April 2025, Mohegan Escrow Issuer – a wholly owned subsidiary of the tribal operator – completed a private offering of $750m in 8.25% first priority senior secured notes due 2030 and $450m in 11.875% second priority senior secured notes due 2031.
Under the terms of the transaction, the release of escrowed proceeds is conditional upon the completion of a private exchange whereby Mohegan and its co-issuer, MS Digital Entertainment Holdings, will exchange $226m in 13.25% senior unsecured notes due 2027 for $250m of the newly issued 2031 notes.
Good to know: Mohegan confirmed that discussions with the investor involved are ongoing
A further condition involves the establishment of a new five-year, $250m senior secured revolving credit facility with a syndicate of banks.
Should both requirements be fulfilled, Mohegan intends to apply the proceeds, alongside cash on hand and borrowings under the new facility, to redeem its 8.00% second priority senior secured notes due 2026 and repay outstanding balances under its current revolving credit facility.
If the escrow conditions are not met by 10 May 2025, the notes will be subject to redemption.
The refinancing effort follows a period of financial pressure linked to Mohegan’s South Korean venture. In February 2025, Bain Capital took operational control of Inspire Entertainment Resort in Incheon, citing missed financial covenant thresholds. Mohegan has disputed aspects of the takeover and stated that negotiations remain ongoing.
The company has previously acknowledged that refinancing would be necessary to support ongoing operations and meet its debt obligations.
Mohegan’s Q1 2025 financial update flagged potential liquidity concerns in the absence of new funding, making this latest round of financing a key milestone in its short-term financial planning.
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