S&P lifts Mohegan Tribal to B

S&P said it raised its issuer credit rating on Mohegan Tribal Gaming Authority to B from B- and removed the rating from CreditWatch, where it was placed with positive implications on Sept. 19.

The agency also affirmed its B issue-level rating on the authority’s recently executed $1.4 billion senior secured credit facility, consisting of a $170 million revolver due 2021, a $445 million term loan A due 2021, a $785 million term loan B due 2023, and the CCC+ issue-level rating on its $500 million senior unsecured notes.

At the same time, S&P withdrew the B- issue level rating on Mohegan’s prior senior secured credit facility, and the CCC rating on its 9¾% senior unsecured notes due 2021, 11% senior subordinated notes due 2018 and floating-rate notes due 2017. Mohegan used the proceeds from its recently executed $1.4 billion credit facility and $500 million senior unsecured notes to repay these debt instruments.

"The upgrade reflects our forecast for adjusted EBITDA coverage of interest to remain around 2x or above, and for discretionary cash flow generation to be positive over the long run," S&P credit analyst Ariel Silverberg said in a news release.

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