MOHEGAN TRIBAL GAMING AUTHORITY AMENDS BANK CREDIT FACILITY TO INCREASE CAPITAL SPENDING CAPACITY FOR EXPANSION PROJECTS
The Mohegan Tribal Gaming Authority, or MTGA or the Authority, the owner and operator of Mohegan Sun, a gaming and entertainment complex located near Uncasville, Connecticut, and Mohegan Sun at Pocono Downs, a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania, received approval on February 13, 2008 from its lender banks to amend certain terms of its $1.0 billion bank credit facility. The amended agreement provides for an increase in the permissible amount of capital expenditures pertaining to Mohegan Sun’s Project Horizon expansion project from $800.0 million to $950.0 million, as well as an increase in the permissible amount of capital expenditures related to the Project Sunrise expansion project at Mohegan Sun at Pocono Downs from $200.0 million to $215.0 million. This amendment also modifies certain provisions of the loan agreement, including MTGA’s total leverage, senior leverage and minimum fixed charge coverage ratio covenants to conform with the increase in projected project expenditures and the change in the projected completion dates for both projects.
“We are pleased our existing bank group has supported the Tribe and MTGA during these difficult times in the credit markets,” said Jeffrey E. Hartmann, Chief Operating Officer of MTGA. “The approval of the amendment ensures that the Authority has the financing in place to complete Project Horizon in Connecticut and Project Sunrise in Pennsylvania, and validates the Mohegan Tribe’s long-term vision of creating destination assets.”
“The fact that MTGA’s bank group strongly supported this Amendment, enabling the increases in expenditures for Project Horizon and elsewhere, is evidence of the Tribe’s excellent relationship with its banks. The strongly affirmative vote bears further testament to the bank group’s confidence in the Tribe, MTGA and its superb cadre of professional managers,” said Bill Newby, Managing Director in Bank of America’s Real Estate, Gaming and Lodging group. “Furthermore, the bank group recognizes that MTGA’s projects at Mohegan Sun and Mohegan Sun at Pocono Downs are exactly the right response to potential competition in adjacent states and are equally suited to building long-term value in those properties.”
About the Authority
The Authority is an instrumentality of the Mohegan Tribe of Indians of Connecticut, a federally recognized Indian tribe with an approximately 507-acre reservation situated in southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive power to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex that is situated on a 185-acre site on the Tribe’s reservation and, through its subsidiary, Downs Racing, L.P., owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania and several off-track wagering facilities located elsewhere in Pennsylvania. The Tribe’s gaming operation at Mohegan Sun is one of only two legally authorized gaming operations in New England offering traditional slot machines and table games. Mohegan Sun currently operates in an approximately 3.0 million square foot facility, which includes the Casino of the Earth, Casino of the Sky, The Shops at Mohegan Sun, a 10,000-seat Mohegan Sun Arena, a 350-seat Cabaret Theatre, 100,000 square feet of meeting and convention space and the approximately 1,200-room luxury Sky Hotel Tower. Mohegan Sun is currently in the midst of Project Horizon – an expansion project that is to include a new hotel, additional retail and restaurant space, and a new 64,000-square-foot “Casino of the Wind.” In addition, Project Horizon expanded Mohegan Sun’s Asian gaming experience in the Casino of the Earth with the August 2007 opening of Sunrise Square. Mohegan Sun at Pocono Downs is also currently in the midst of Project Sunrise, which is being developed on land adjacent to the existing gaming facility. When completed, the combined facility is anticipated to include approximately 2,500 slot machines, three fine dining restaurants, a 300-seat buffet, a quick-serve dining area, 7,000 square feet of retail shopping, two nightlife venues and additional parking and bus amenities. More information about the Authority and its properties can be obtained by visiting www.mtga.com.
Some information included in this press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include information relating to business development activities, as well as capital spending and financing sources. These statements can sometimes be identified by the use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or “intend” and similar expressions. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the Authority. These risks and uncertainties include, but are not limited to, those relating to increased competition in the gaming industry, including the legalization or expansion of gaming in New England, New York, New Jersey and Pennsylvania (including the December 2006 approval of two Category Two slot machine facilities, one of which opened in October 2007, in the immediate market of Mohegan Sun at Pocono Downs), the financial performance of Mohegan Sun, Mohegan Sun at Pocono Downs and the off-track wagering facilities, dependence on existing management, potential adverse changes in local, regional, national or global economic climates, the Authority’s leverage and ability to meet its debt service obligations, changes in federal or state tax laws or the administration of such laws, changes in gaming laws or regulations (including the limitation, denial or suspension of licenses required under gaming laws and regulations), and the continued availability of financing. Additional information concerning potential factors that could affect the Authority’s financial results is included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2007, as well as its other reports and filings with the SEC. The forward-looking statements included in this press release are made only as of the date of this release. The Authority does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Authority cannot assure you that projected results or events will be achieved or will occur.
Press Release Mohegan Tribal Gaming Authority, Uncasville, Connecticut, February 19, 2008
Mitchell Grossinger Etess
Chief Executive Officer
Mohegan Tribal Gaming Authority
Leo M. Chupaska
Chief Financial Officer
Mohegan Tribal Gaming Authority