Mohegan Sun Implosion

Mohegan Refinancing Puts Casino Operations at Risk
By ICTMN Staff

The operator of the Mohegan Sun casinos has not been able to reach an agreement to refinance its $811 million debt, increasing the chances it will have to cease operations, reported Bloomberg News.

Mohegan Tribal Gaming Authority (MTGA) currently runs the Mohegan Sun casinos in Connecticut and Pennsylvania, and is bidding for a casino license in Palmer, Massachusetts. On November 22, Gov. Deval Patrick signed legislation, permitting casino gambling in Massachusetts. The Mohegan’s proposed gaming resort in Palmer features a 600-room hotel and spa, and a casino with slots, table games and poker.

But the proposed resort’s amenities may prove irrelevant if the MTGA cannot refinance its fiscal 2012 maturities. MTGA recently announced that the state of its refinancing efforts “raise substantial doubt about our ability to continue as a going concern.”

The Authority also said it received a default waiver from its bank lenders on December 28. Mohegan is “pleased with the progress made in recent weeks toward finalizing our refinancing plan,” Chief Executive Officer Mitchell Etess said in a statement December 29.

Bloomberg states that Mohegan is being advised by Blackstone Group LP and Credit Suisse Group AG in an effort to refinance much of $1.61 billion in debt owed as of September 30, including $535 million outstanding under a bank credit facility maturing March 9, and $250 million of senior subordinated notes due April 1. PricewaterhouseCoopers LLP is the auditor.