The Mohegan Tribal Gaming Authority (MTGA) is unlikely to suffer significant financial repercussions following the forced transfer of control of its ‘Inspire’ South Korean casino resort to Bain Capital. That is according to separate assessments from credit rating agencies Fitch Ratings Inc and S&P Global Ratings Inc.
Last month, United States-based private investment firm Bain Capital assumed control of the Inspire resort (pictured in a file photo), which launched non-gaming operations in November 2023, followed by the opening of its foreigner-only casino in February last year.
MTGA confirmed that the change of control stemmed from its subsidiary MGE Korea Ltd failing to meet financial covenant tests linked to a loan held by Bain Capital. As a result, the investment firm took over the resort’s operations.
“Fitch expects limited impact on [MTGA], as there are no cross defaults,” the ratings agency stated in a note issued on Tuesday. It further clarified that MTGA “is no longer a part of the Korea credit facility after the term loan acceleration.”
On Tuesday, Fitch assigned MTGA a first-time ‘B’ long-term issuer default rating with a ‘stable’ outlook. The assessment followed MTGA’s announcement of plans for two proposed senior secured note issuances: one worth US$600 million due in 2030, and another of the same value due in 2031. Additionally, the casino operator intends to secure a new senior credit facility of at least US$250 million, either before or at the same time as the bond issuance.
“Challenges [to MTGA credit profile] include the accelerated term loan at the Korean subsidiary,” Fitch noted. However, the agency stated that this situation “will not lead to a [MTGA] default, and may enable future funding to meet expressed guarantees.”
S&P Global Ratings reaffirmed its existing ‘B-’ issuer credit rating and ‘stable’ outlook on MTGA. In its own report, issued on Tuesday, the agency cited its expectation that, following the deconsolidation of Inspire Korea, MTGA’s leverage would remain “in the low-7 times area by fiscal year-end 2025.”
Despite losing control of the Inspire resort, MTGA has pledged to continue negotiations with Bain Capital. The company stated last month its commitment to working towards “a mutually agreeable solution that allows us to be continuing partners with the people of [South] Korea and our various stakeholders.”
