Mohegan Tribal's refinances debt in Q4, reduces cost of capital by 150 bps

By Lisa Kerner

Charlotte, N.C., Nov. 20 - Mohegan Tribal Gaming Authority chief executive officer Mitchell Grossinger Etess said he was "pleased" with the company's fourth-quarter results, especially given the economic environment.

The company was able to complete two refinancing transactions to strengthen its balance sheet, improve free cash flows and reduce annualized interest by about $16 million, according to Etess.

"On Aug. 15, 2013, we issued $500 million of senior unsecured notes and used the proceeds to tender and redeem all $418 million of our outstanding third-lien notes and $69 million of additional senior subordinated notes due 2018," chief financial officer Mario Kontomerkos said during Mohegan's earnings conference call on Wednesday.

On Tuesday, the company completed a second series of transactions relating to its bank credit facilities and second-lien secured notes.

"We entered into $955 million of new senior secured credit facilities comprised of a $ 100 million revolving facility, a $125 million term loan A and $730 million term loan B. We used the proceeds to repurchase or redeem all $200 million of our outstanding second lien notes and to repay and terminate our existing revolving facility term loan A and term loan B," Kontomerkos said.

The refinancings resulted in a reduction of Mohegan's debt cost of capital by at least 150 basis points.

According to Kontomerkos, Mohegan's leverage at quarter end was 5.99 times.

The company's total debt totaled $1.68 billion and nothing was drawn on the revolver. About $72 million is available under its bank credit facilities.

Mohegan ended the fourth quarter with cash of $63.6 million and liquidity of $76.3 million, net of bank roll and restricted cash.

Distributions to the Tribe totaled $15 million for the quarter ended Sept. 30, compared to $12.5 million in the fourth quarter of fiscal 2012. Distributions to the Tribe are expected to total $50 million for fiscal 2014.

Consolidated financial highlights

Fourth-quarter net revenues were down 1.9% year-over-year at $345.3 million.

Adjusted EBITDA declined 4.7% to $77.2 million.

Income from operations was $57.2 million, a 1.6% decrease from the prior-year period.

Net income attributable to the Authority decreased 67.1% to $4.9 million for the quarter, due mainly to a loss on early exchange of debt and write-off of debt issuance costs and the decline in income from operations.

Mohegan Tribal Gaming is an Uncasville, Conn., operator of gaming and entertainment enterprises.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.