Mohegan Tribal Gaming Authority Halting SEC Filings

Posted on: January 31, 2023, 01:41h. 

Last updated on: January 31, 2023, 04:14h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The Mohegan Tribal Gaming Authority (MTGA) announced Monday that it will no longer participate in the Securities and Exchange Commission’s (SEC) voluntary filing system.

Mohegan
Mohegan Sun Casino in Connecticut. The Mohegan Tribal Gaming Authority (MTGA) will no longer file financial reports with the SEC. (Image: Mohegan Sun)

The tribal gaming giant didn’t give a specific reason for why it’s withdrawing from SEC filings. The move caught some market observers by surprise, because the casino operator hasn’t run afoul of SEC guidelines, nor is it tussling with the regulatory agency. It could be a cost-cutting move because it isn’t cheap to file with the SEC.

Mohegan intends to continue to provide current reports and quarterly and annual financial information on our website at www.mohegangaming.com/, under the ‘Investor Relations/Financial Updates’ section. Interested parties may sign up at that website link to receive email updates from us. We also plan to continue to host quarterly operating results conference calls,” according to a statement issued by the Connecticut-based tribal casino operator.

As a tribal gaming organization, Mohegan isn’t a publicly traded firm. But it can and does sell debt in public markets. Prior to Monday, the casino operator’s most recent SEC filing was dated January 6, announcing a convertible bond issue tied to the development of its Inspire integrated resort in South Korea.

Mohegan Rated by Credit Agencies

As a sizable issuer of corporate debt, Mohegan is tracked by some of the major credit ratings agencies – an important avenue for bondholders to stay abreast of the issuer’s credit profile.

Moody’s Investors Service last rated the tribal casino operator two years ago, tagging it with a “Caa1” grade with a “stable” outlook. That’s a highly speculative rating, and one that, at the time of issuance, reflected Mohegan’s large debt/earnings before interest, taxes, depreciation, and amortization (EBITDA) profile. However, there are some positives associated with MTGA bonds.

“Positive rating considerations include MTGA’s high quality, well-established, and a large amount of gaming and attractive nongaming amenities, along with its earnings diversification efforts. Diversification efforts outside of MTGA’s restricted group structure include management and development fees from unaffiliated casinos in the US, along with MTGA’s investment in a resort casino project in South Korea, which Moody’s views as a long-term positive for the company, despite inherent risks,” noted Moody’s.

S&P rates Mohegan a “B-,” which is also a junk grade. In the US, the company operates casino hotels in Connecticut, Washington, Pennsylvania, New Jersey, and Nevada, and owns the WNBA’s Connecticut Sun.

Mohegan Debt History

Like some other tribal operators, Mohegan has a checkered history when it comes to servicing debt. In 2011, the casino operator tried and failed to refinance more than $800 million in debt. But it was able to refinance some of those obligations the following year.

Amid temporary closures of its gaming venues in 2020 due to the COVID-19 crisis, MTGA missed a $19.7 million interest payment.

The tribal operator’s outstanding issues include bonds yielding 7.875% maturing in October 2024, and debt with a yield of 8% coming due in February 2026, according to CBonds.