Mohegan issues $1.2 billion in new secured notes as part of refinancing strategy

Casino operator Mohegan has issued $1.2 billion in new secured notes as part of a refinancing strategy, designed to address upcoming debt maturities and improve liquidity. The move follows the company's warning about debt problems earlier this year and a period of financial pressure linked to its South Korean venture.

Mohegan closed its debt refinancing after saying in January that it was at risk of defaulting on several loans. The warning followed a $234.5 million loss in the 2024 fiscal year, attributed primarily to costs related to the opening of Inspire Entertainment Resort, its new $1.6 billion South Korea integrated resort.

On April 10, subsidiary Mohegan Escrow Issuer LLC closed on a private offering of $750 million of 8.25% first-priority senior secured notes due in 2030, and $450 million of 11.875% second-priority senior secured notes due in 2031.

Refinancing through secured notes allows a company to reduce its cost of borrowing or extend repayment timelines. This, in turn, can free up cash flow for other operational needs.

The proceeds of the offering 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. The lending entities weren’t disclosed.

The company called the offering “a first step in the expected closing of significant refinancing transactions,” which also includes a private notes exchange with MS Digital Entertainment Holdings LLC, and an entry into a new, five-year $250 million senior secured revolving credit facility. The credit facility is with "a syndicate of banks," according to the announcement.

Financial troubles linked to the South Korean venture led Bain Capital to take operational control of Inspired Entertainment Resort in February 2025, citing missed financial covenant thresholds. Mohegan has disputed aspects of the takeover and stated that negotiations remain ongoing.  

The operator had previously acknowledged that refinancing would be necessary to support ongoing operations and meet its debt obligations.