This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Mohegan Sun Operator Asks to Amend Covenant

NEW YORK ( The Deal) -- Mohegan Tribal Gaming Authority, the Native American tribal entity that operates the Mohegan Sun casino, announced on Tuesday, July 23, that it has opened a consent solicitation asking its most senior class of noteholders to amend a covenant in order to pave the way to refinance subordinated debt.

Uncasville, Conn.-based Mohegan already refinanced its debt in Feb. 2012, but a restructuring professional who has experience in the tribal gaming space thinks this additional refinancing is a logical move.

"These coupons have relatively high rates, and most of them are trading above par in the case of second-lien notes, while juniors are trading near par, so it's not surprising that they're looking to change their maturity profile," the source said. Mohegan is asking holders of its 11.5% second-lien senior secured notes due 2017 to amend a covenant that would allow the tribe to refinance two levels of subordinated debt -- the 10.5% third-lien senior secured notes due 2017 and the 11% senior subordinated toggle notes due 2018.

Mohegan is also seeking to amend another covenant to explicitly allow it to do business with the Mohegan Tribe of Indians of Connecticut if it were to open a hotel on tribal land.

The restructuring source believes that uncertainty about Mohegan's future is conducive to a "wait-and-see" approach. "There are still questions about events that are coming down the pipe," he said.

The casino will see one big drain on its revenues disappear in the beginning of 2014 when Mohegan's legal obligation to give 5% of its gross revenues each year to the casino's initial backer, Trading Cove Associates, expires.

On the negative side, Massachusetts' plan to get into the gaming business with three new casinos will heighten Mohegan's competition.

"Whether Mohegan will be part of that [opening of new casinos in Massachusetts] is still up in the air," the source said.

Pennsylvania, Rhode Island and New York also plan to enter the gaming space, creating even more regional competition for Northeastern players such as Mohegan. For now, Mohegan's main competition is Ledyard, Conn.'s Foxwoods Resort Casino, another tribe-owned facility that completed a complex debt restructuring process on July 1.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
FB $105.45 0.00%
GOOG $750.26 0.00%
TSLA $231.61 0.00%
YHOO $32.94 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs