Moody’s upgrades Mohegan Tribal Gaming corporate rating

Moody’s upgrades Mohegan Tribal Gaming corporate rating

The Mohegan Tribal Gaming Authority has had its corporate family rating for debt raised to ‘Caa1’ with a ‘stable’ outlook, from ‘Caa2’, by Moody’s Investors Service Inc. The Mohegan Tribal Gaming Authority controls United States-based tribal casino operator Mohegan Gaming and Entertainment, a group with investment in Asia.

The ratings institution also improved the authority’s ‘probability of default’ rating to ‘Caa1-PD’ from ‘Caa2-PD’.

According to Moody’s, obligations rated ‘Caa’ are “judged to be speculative of poor standing and are subject to very high credit risk”.

Moody’s states that corporate family ratings classified as ‘Caa-PD’, are “judged to be speculative of poor standing subject to very high default risk, and may be in default on some but not all of their long-term debt obligations”.

Additionally, in a Friday memo, Moody’s affirmed a ‘B1’ rating on Mohegan Tribal Gaming Authority’s first-lien credit revolver facility; and a ‘Caa1’ rating on its senior secured second-lien notes.

Obligations rated ‘B’ are “considered speculative and are subject to high credit risk,” according to Moody’s.

The authority’s ‘speculative grade liquidity’ rating was upgraded to ‘SGL-3’ from ‘SGL-4’.

The Moody’s commentary noted: “The upgrade considers that on January 26, Mohegan Tribal Gaming Authority closed on a refinancing that had a meaningful positive impact on the company’s liquidity.”

The ratings institution added: “This, along with Moody’s expectation that Mohegan Tribal Gaming Authority will generate about US$25 million of positive free cash flow after interest, cash distributions and capital expenditures in fiscal 2021, will improve the company’s ability to manage through the coronavirus challenges and reduce its leverage over time.”

The authority had just over US$2 billion in debt as of September 30, it said in a January 13 filing in the U.S.

Mohegan Tribal Gaming Authority said in a January 27 filing it had clinched, a day earlier, a US$262.875-million senior secured revolving credit facility, due to mature on April 14, 2023.

The same filing said that on January 26, the company had issued – via a private placement – the US$1.175-billion in aggregate principal amount of second-priority senior secured notes due 2026, announced earlier in the month.

An accompanying press release said the authority had applied the net proceeds from the notes and the new senior secured credit facility, “together with cash on hand, to fund the repayment, satisfaction and discharge of certain existing indebtedness of Mohegan Gaming and Entertainment”.

On January 20, Mohegan Gaming and Entertainment confirmed to GGRAsia that it had formally asked local authorities in South Korea if it could postpone to 2023 the opening of the group’s Inspire Entertainment Resort, a complex with a foreigner-only casino, near Incheon International Airport, South Korea’s main air hub.

On Thursday (January 28) a joint press release said Mohegan Gaming and Entertainment had teamed with a Japan unit of Hong Kong-listed Oshidori International Holdings Ltd, for a tilt at creating a casino resort in the Japanese prefecture of Nagasaki.

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