Insolvent Mohegan Sun Refinances

Mohegan Tribal Gaming Authority Completes Financing Deal
The new structure allows for more flexibility
By Carrie Jacobson


The Mohegan Tribal Gaming Authority, which owns and operates the Mohegan Sun and Pocono Downs in Wilkes-Barre, PA, has renegotiated its debt, with a $225 million term credit line, and restatement of its bank credit, totaling about $1 billion.

In addition to the credit line, the gaming authority renegotiated $961.8 million in debt, says the Hartford Courant.

According to Market Watch, roughly $10.8 million was paid to holders of old debt.
The moves mean the due date for repayment have been extended to 2016 and 2018, as opposed to beginning in 2013.

Keith Foley, an analyst at Moody's Investors Service, said the activity does not reduce the authority's debt, but does add more time, giving the authority more flexibility.
Meantime, other projects are languishing a bit.

In February, Palmer, MA, Town Council President Paul E. Burns pushed Mohegan Sun to find a partner, or investor, and get moving on its plan to build a resort casino in the town, according to MassLive.

He also has started to work to find other casino developers who might be interested in creating a proposal for other available sites in town, either to compete against Mohegan, or work with them.

In Sullivan County, NY, a project to rebuild the Concord is lagging, in large part because of issues two developers are having with each other.

"We are very pleased to announce the successful completion of our refinancing," said Bruce "Two Dogs" Bozsum, Chairman of the Authority's Management Board and Mohegan Tribal Council.

"This accomplishment reflects a tremendous team effort, and we would like to extend our thanks to everyone involved at both the Authority and the Tribal government. We believe that this transaction demonstrates and confirms to the financial community that market-based solutions to comprehensive debt refinancings in the Native American gaming space are achievable."

Moody's Investor Service downgraded Mohegan Sun's heavy debt last spring, citing increased competition and declining gambling revenues.


Palmer Town Council President Paul Burns urges Mohegan Sun to find investors to boost casino proposal
February 28, 2012
By Lori Stabile, The Republican The Republican

PALMER – Town Council President Paul E. Burns thinks Mohegan Sun should find a partner, or investor, if it wants to make its plan to build a resort casino here a reality.

He also is trying to find other casino developers who might be interested in creating a proposal for other available sites in town, either to compete against Mohegan, or work with them.

"I think we have to cover all our bases," Burns said.“I’m really just trying to encourage other development. Whether it supports or competes with Mohegan Sun isn’t my concern. My concern is that we generate some strong economic development opportunities in the town,” Burns said.

Burns said he thinks it's important to have the best casino proposal, as Palmer is now competing with Brimfield (MGM Resorts International), Springfield (Ameristar)and Holyoke (Hard Rock), and potentially Chicopee, for the lone Western Massachusetts casino license.

Two months ago, Burns said, he called on Mohegan Sun to "step up or step out" and prove it has the financing to make the project happen. Burns said the project has gotten smaller since it was first unveiled in 2007 - it once was advertised as an $1 billion resort casino and it has been scaled down to $500 million to $600 million. Meanwhile, Connecticut-based Mohegan is trying to refinance approximately $1.1 billion of debt, but has extended the deadline for the bond exchange several times. The latest deadline was Feb. 22.

Moody's Investor Service downgraded the company's heavy debt last spring, citing increased competition and declining gambling revenues.

Burns issued a press release recently – leaving off his title as Town Council president - saying that “to ensure Palmer is chosen it will be vitally important for Mohegan Sun to partner with other developers who can support this vision.” He wrote that he believes this approach would stand out to the Gaming Commission, which will award casino licenses.

“I urge Mohegan to be open to this concept and I urge other interested developers, whether in the casino, hospitality or some other field, to visit Palmer and see all we have to offer. As always I would be happy to meet with anyone looking to bring economic development opportunities to town,” Burns wrote in the release.

Burns then named what the advantages he thinks the Palmer site has over competing casino proposals – a dedicated Massachusetts turnpike exit, strong community support, existing infrastructure, a large site, zoning that allows such a development and ample land throughout the community for development of projects to support the casino. All ignoring that a citizens' committee determined that the annual cost to the town would be $18 MILLION TO $39 MILLION - a report Mr. Burns REFUSED to air publicly. And ignoring that Palmer has NO water.

Burns later said he left off his title in the press release because he says he is not speaking for the council, and these are his own actions.

He said he has made calls to five to eight entities - developers of casinos and hotels that he would not name – in which he identified himself as the Town Council president and discussed economic development opportunities in Palmer. All rather questionable!

“I’m encouraging a dialogue about opportunities in Palmer,” Burns said.

Burns named the former Olsen Farm off Route 20, or land right off the turnpike exit, as potential alternative casino or development locations.

James L. St. Amand, community liaison for Northeast Realty, which is leasing the land to Mohegan Sun for a resort casino, said Mohegan’s financial woes are no secret, and said he feels Burns is showing “strong leadership” by seeking a partner for Mohegan or other developers.

“I think it’s appropriate as the Town Council president for the economic development for Palmer. And hopefully Mohegan will step up and clarify their financial situation so we can move forward,” St. Amand said.

Mitchell Etess, chief executive officer of Mohegan Tribal Gaming Authority, said in a statement that “We believe Mohegan Sun Palmer represents the best opportunity for Western Massachusetts to generate economic development from expanded gaming, including the potential for complementary development of other nearby parcels by other entities.”

“We continue to be pleased with the strong support we have in the community as we make progress on a host community agreement,” Etess continued.