Mohegan Tribal gets $855 million of term loans, $100 million revolver

By Angela McDaniels

Tacoma, Wash., Nov. 20 - The Mohegan Tribal Gaming Authority entered into a loan agreement on Tuesday that provides for a $100 million senior secured revolving credit facility, a $125 million senior secured term loan A and a $730 million senior secured term loan B, according to an 8-K filing with the Securities and Exchange Commission.

The term loan B was upsized from $465 million, and the term loan A was downsized from $150 million.

The credit facilities mature on July 15, 2018. The authority has the option to extend the revolver and the term loan A to Nov. 19, 2018 and the term loan B to Nov. 19, 2019.

The interest rate for the revolver and term loan A is Libor plus 350 basis points to 450 bps. The interest rate for the term loan B is Libor plus 450 bps with a 1% Libor floor. The commitment fee for the revolver is 37.5 bps to 50 bps.

The term loan B has an original issue discount of 99 and hard call protection of 102 in year one and 101 in year two, according to a market source.

Pricing talk on the term loan B firmed at Libor plus 450 bps, the tight end of the Libor plus 450 bps to 475 bps talk, and the Libor floor was reduced to 1% from 1.25%, the source said.

Quarterly amortization for the term loan A is 5% per year in year one, 7.5% per year in year two and 10% per year in each of the following years. Quarterly amortization for the term loan B is 1% per year.

RBS Securities Inc., Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Goldman Sachs Bank USA, SunTrust Robinson Humphrey Inc., Credit Agricole and Jefferies Finance LLC are the joint lead arrangers on the deal with RBS Citizens, NA as administrative and collateral agent.

The proceeds of the term loans and a drawing under the revolver were used to repurchase the $199.77 million of 11½% second-lien senior secured notes due 2017 tendered in the authority's tender offer as of Nov. 18, to satisfy and discharge the authority's obligations for the remainder of the notes, which will be redeemed, and to satisfy in full all amounts due under its fourth amended and restated loan agreement with Bank of America, NA as administrative agent and its loan agreement with Wells Fargo Gaming Capital, LLC as administrative agent. The revolver will otherwise be available for general corporate purposes.

The loan agreement includes financial covenants for total leverage, secured leverage and minimum fixed-charge coverage.

The facilities are guaranteed by Downs Racing, LP, Backside, LP, Mill Creek Land, LP, Northeast Concessions, LP, Mohegan Commercial Ventures-PA, LLC, Mohegan Basketball Club LLC, Mohegan Ventures-Northwest, LLC, Mohegan Golf, LLC, Mohegan Ventures Wisconsin, LLC, Wisconsin Tribal Gaming, LLC and MTGA Gaming, LLC. The collateral securing the credit facilities is substantially all of the property and assets of the authority and the guarantors other than Mohegan Basketball Club.

Mohegan is an Uncasville, Conn.-based operator of gaming and entertainment enterprises.

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