S&P rates Mohegan Tribal notes CCC+

S&P said it assigned its CCC+ issue-level rating to Mohegan Tribal Gaming Authority's $503 million of senior unsecured notes due in 2027.

MTGA issued the notes in exchange for $477 million of its $500 million senior unsecured notes due in 2024, also rated CCC+, in December.

Concurrently, the issuer is seeking an extension of its revolving credit facility maturity to November 2025 from April 2024. “Our rating on this $263 million facility remains B-, same as our issuer credit rating on MTGA because this debt is secured and there are no material elements of subordination risk,” S&P said in a press release.

The exchange and the planned revolver extension lower refinancing risk and extend maturities, the agency said. However, the new notes have a coupon of 13¼%, compared with 7.88% for the replaced notes. This adds about $29 million of annual interest, bringing its annual cash interest expense to about $161 million. This total excludes interest expense on the Inspire Korea debt, which has an interest reserve to cover debt service for the next several years.

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