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Mohegan Gaming Calls for Casino Bailout

Mia Gardner | 26 May 2020

Mohegan tribe-owned Mohegan Gaming has reportedly been affected by temporary shut-down orders to such an extent that it is now looking to secure business rescue loans of up to $100 million. The loans are needed for the casino and entertainment group to survive what is fast shaping up to an ongoing economic crisis of which the backend is long yet to be seen.

Financial and markets news and reporting service Bloomberg last week ran a story detailing the extent of the tribe’s involvement with the enterprise trading under the name Mohegan Gaming and Entertainment. The entity oversees several North American casinos, including industry giant and Eastern Connecticut-based Mohegan Sun.

No Trade Means No Money

Since all casinos and gambling venues have practically not traded mostly since mid-March, Mohegan Gaming and Entertainment, like so many others just like it, has not seen even as much as a semblance of a consistent incoming revenue stream for months now, let alone any form of significant revenue income.

The enterprise is now having to rely out outside sources of income in the form of loans and borrowings and apparently hopes to secure the services of various lenders with the help of independent financial advisors Rothschild & Company. One of the first-lien lenders Mohegan Gaming hopes to secure is Credit Suisse Group AG.

Payment Holidays Sought

In addition to hopes of new lenders becoming available, Mohegan Gaming and Entertainment is according to Bloomberg, also trying to amend its existing loan agreements in such a way that the advances currently already in place are restructured in such a way that more leniency may be enjoyed in terms of periods during which paybacks are expected to be made. The casino conglomerate is reportedly eager to extend all existing as well as forthcoming loans attracting interest payable of more than 14%, to maturity dates only coming into effect in next year October.

But a challenge has been the fact that the majority of Mohegan Gaming and Entertainment’s casinos are in fact, situated on tribal land. This has reportedly been experienced and described as “off-putting” by several potential financiers. The question of whether or not lenders and/or investors will ultimately be in a position to fully exercise their rights as creditors being that the entities are located on tribal soil, appears to be one that is especially nagging and causing major uncertainty and hesitance.

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