Gaming Co. Scores Liquidity Jackpot

  • 20 Apr 2003
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Mohegan Tribal Gaming Authority landed an increased $391 million credit in an effort to obtain more liquidity for the gaming company. Jeffrey Hartmann, cfo of Mohegan Tribal, compared the new facility to the old line, which was a $500 million reducing revolver, which terminated $50 million of availability every quarter. When the new deal was completed, Mohegan Tribal had $300 million in availability under the old deal, Hartmann said.

The new facility comprises a $291 million revolver and a $100 million term loan. Both have a five-year tenor and are priced against a leverage-based grid. Mohegan Tribal also has the ability to increase the facility to $500 million via a green shoe provision that will allow the company to have access to even greater liquidity, noted Hartmann. He commented that the pricing on the new facility is about 1/8% tighter than that on the old revolver because of the removal of risk associated with the expansion of its hotel and casino complex. But he declined to elaborate on the current level. He explained that the company decided to secure a term loan in an effort to attract institutional lenders in the future. "Typically, in the Indian gaming market, term loan investors have not been given an opportunity," he said.

Bank of America and Citigroup were the existing leads and they retained those roles on the new deal. "Our entire bank group basically rolled over into the new facility," said Hartmann. Société Générale, Wells Fargo Bank, Fleet National Bank, Credit Lyonnais, and Citizens Bank of Connecticut also hold roles on the facility. The company's former revolver was not set to mature until 2004, but Mohegan Tribal decided to refinance sooner to diminish credit risk given the current geopolitical climate. The company originally went out looking for a $350 million credit, but oversubscription led to the increase.

  • 20 Apr 2003

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