| LONG-TERM DEBT | LONG-TERM DEBT: Long-term debt consisted of the following (in thousands): September 30, 2020 September 30, 2019 Senior Secured Credit Facility - Revolving $ 197,000 $ 102,000 Senior Secured Credit Facility - Term Loan A, net of discount and debt issuance costs of $4,199 and $4,236, respectively 227,710 263,829 Senior Secured Credit Facility - Term Loan B, net of discount and debt issuance costs of $20,809 and $16,925, respectively 792,829 805,394 2016 7 7/8% Senior Unsecured Notes, net of discount and debt issuance costs of $8,179 and $9,565, respectively 491,821 490,435 MGE Niagara Resorts Credit Facility - Revolving 26,187 — MGE Niagara Resorts Credit Facility - Term Loan, net of debt issuance costs of $847 and $1,002, respectively 69,297 73,564 MGE Niagara Resorts Convertible Debenture 29,928 30,204 Mohegan Expo Credit Facility, net of debt issuance costs of $658 and $925, respectively 27,750 29,357 Guaranteed Credit Facility, net of debt issuance costs of $877 and $1,191, respectively 29,529 31,840 Mohegan Tribe Subordinated Loan 5,000 — Redemption Note Payable, net of discount of $15,701 and $23,905, respectively 69,099 81,329 Other 3,860 1,205 Long-term debt 1,970,010 1,909,157 Less: current portion of long-term debt (75,355) (76,909) Long-term debt, net of current portion $ 1,894,655 $ 1,832,248 Maturities of long-term debt are as follows (in thousands): Fiscal Years 2021 $ 75,355 2022 461,205 2023 38,198 2024 911,219 2025 505,041 Thereafter 30,262 Total $ 2,021,280 Senior Secured Credit Facilities In October 2016, the Company entered into a Credit Agreement among the Company, the Mohegan Tribe, Citizens Bank, N.A., as Administrative and Collateral Agent, and the other lenders thereto, providing for $1.4 billion of senior secured credit facilities (the “Senior Secured Credit Facilities”), comprised of a $170.0 million senior secured revolving credit facility (the “Revolving Facility”), a $445.0 million senior secured term loan A facility (the “Term Loan A Facility”) and a $785.0 million senior secured term loan B facility (the “Term Loan B Facility”). The Revolving Facility and the Term Loan A Facility mature on October 13, 2021 and the Term Loan B Facility matures on October 13, 2023. In April 2017, the Company entered into an amendment to the Senior Secured Credit Facilities. This amendment reduced the interest rate margins by 0.50%. In April 2018, the Company entered into a second amendment to the Senior Secured Credit Facilities primarily to increase the borrowing capacity under the Revolving Facility by $80.0 million, to borrow an additional $80.0 million under the Term Loan B Facility and to revise the covenants and interest rates under the Term Loan A Facility and the Term Loan B Facility. On August 28, 2020, the Company entered into a fourth amendment to the Senior Secured Credit Facilities (the “Fourth Amendment”). Pursuant to the Fourth Amendment, the Company will, during the period beginning on August 28, 2020, and ending upon the achievement of certain financial ratios specified in the Fourth Amendment (such period, the “Financial Covenant Restricted Period”), be subject to, among other things: (i) a minimum liquidity covenant that requires cash and cash equivalents and available borrowings under the Revolving Facility to be at least $70.0 million as of the last day of each calendar month, (ii) a covenant that requires the Company be in pro forma compliance with such minimum liquidity covenant in order to make any interest payment on the 2016 7 7 / 8 % Senior Unsecured Notes and (iii) certain additional reporting covenants. The Fourth Amendment also waives the Company’s obligation to comply with its financial covenants for its fiscal quarters ending March 31, 2020 and June 30, 2020, and modifies its financial covenants applicable during the Financial Covenant Restricted Period to provide the Company with greater flexibility in light of the impact of COVID-19 on the Company's business, in particular during the March 2020 through May 2020 period, all as set forth in the Fourth Amendment. In addition, the Fourth Amendment provides that, commencing on August 24, 2020: (i) loans under the Term Loan A Facility will bear interest at either an adjusted LIBOR rate or a base rate, in each case, plus an applicable margin equal to 6.125% per annum for adjusted LIBOR rate loans and 5.125% per annum for base rate loans, and (ii) loans under the Term Loan B Facility will bear interest at either an adjusted LIBOR rate or a base rate, in each case, plus an applicable margin equal to 6.375% per annum for adjusted LIBOR rate loans and 5.375% per annum for base rate loans, provided that the applicable rate for loans under the Term Loan B Facility are subject to certain ratings-based step downs and “most-favored-nation” protections as set forth in the Fourth Amendment. The Fourth Amendment also provides for a 1.00% per annum LIBOR floor applicable to adjusted LIBOR rate loans under the Term Loan A Facility and a 0.75% per annum LIBOR floor applicable to adjusted LIBOR rate loans under the Revolving Facility. Lastly, the Fourth Amendment: (i) carves out COVID-19 related effects from certain terms of the Senior Secured Credit Facilities and (ii) makes certain other changes to the covenants and other provisions of the Senior Secured Credit Facilities. Substantially concurrently with entering into the Fourth Amendment, the Mohegan Tribe made a $20.0 million cash payment to the Company, consisting of: (i) a $10.0 million contribution, (ii) a $5.0 million subordinated loan maturing on October 16, 2024 and bearing interest in-kind at 10% per annum and (iii) a $5.0 million reimbursement commensurate with a reduction in governmental and administrative services provided by the Mohegan Tribe. The Company incurred approximately $16.1 million in costs in connection with the Fourth Amendment. New transaction costs totaling $2.8 million were expensed and recorded as a loss on modification of debt. New debt issuance costs totaling $3.0 million were capitalized as an asset and will be amortized over the term of the related debt. The remaining $10.3 million in new debt issuance costs was reflected as debt discount and will be amortized over the term of the related debt. The Term Loan A Facility is repayable, in quarterly installments, at a rate of $66.8 million per annum through December 2018, $44.5 million per annum through December 2019 and $33.4 million per annum thereafter, with the balance payable at maturity in October 2021. The Term Loan B Facility is repayable, in quarterly installments, at a rate of $8.7 million per annum, with the balance payable at maturity in October 2023. The Term Loan A Facility and the Term Loan B Facility require additional mandatory repayments based on a percentage of excess cash flow, as defined under the Senior Secured Credit Facilities. For the fiscal years ended September 30, 2020, 2019 and 2018, there were no mandatory repayments. As of September 30, 2020, letters of credit issued under the Revolving Facility totaled $2.2 million. The Company had $50.8 million of borrowing capacity under its Revolving Facility as of September 30, 2020, after factoring in outstanding letters of credit. As of September 30, 2020, the $197.0 million outstanding under the Revolving Facility accrue interest at 4.50%. As of September 30, 2020, outstanding borrowings under the Term Loan A Facility and the Term Loan B Facility accrue interest at 7.13% and 7.38%, respectively. The Company is also required to pay leverage-based undrawn commitment fees of between 37.5 thousand and 50 basis points under the Revolving Facility. This fee was 50 basis points as of September 30, 2020. The Company's obligations under the Senior Secured Credit Facilities are guaranteed by certain of the Company’s restricted subsidiaries, as defined under the Senior Secured Credit Facilities. The Senior Secured Credit Facilities are secured by substantially all of the Company’s and its restricted subsidiaries’ assets. The Senior Secured Credit Facilities contain covenants governing: incurrence of indebtedness, incurrence of liens, payment of dividends and other distributions, investments, asset sales, affiliate transactions and mergers or consolidations. The Senior Secured Credit Facilities also include financial maintenance covenants pertaining to total leverage, senior secured leverage and minimum fixed charge coverage. In addition, the Senior Secured Credit Facilities contain events of default relating to, among other things, failure to make required payments, breach of covenants and breach of representations. On September 30, 2020 and 2019, the bank that administers the Company's debt service payments for its Senior Secured Credit Facilities made required principal payments on behalf of the Company totaling $10.5 million and $13.3 million , respectively, but did not accordingly debit the Company's bank account for these payments . As of September 30, 2020 and 2019, the Company reflected these non-cash transactions as reductions to current portion of long-term debt and corresponding increases to other current liabilities. On the respective following banking days, the bank withdrew the payments from the Company's bank account, resulting in reductions to the Company's cash and cash equivalents and other current liabilities. Senior Unsecured Notes 2016 7 7 / 8 % Senior Unsecured Notes In October 2016, the Company issued $500.0 million senior unsecured notes with interest at 7.875% per annum (the “2016 Senior Unsecured Notes”). The 2016 Senior Unsecured Notes mature on October 15, 2024. Interest on the 2016 Senior Unsecured Notes is payable semi-annually in arrears on April 15 and October 15. At any time prior to October 15, 2019, the Company could have redeemed the 2016 Senior Unsecured Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2016 Senior Unsecured Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption and a make-whole premium. The 2016 Senior Unsecured Notes are redeemable at the Company’s option, in whole or in part, at any time on or after October 15, 2019, at specified redemption prices, plus accrued and unpaid interest, if any, to the date of redemption. If the Company experiences specific kinds of change-of-control triggering events, it is required to make an offer to repurchase the 2016 Senior Unsecured Notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if any. Additionally, if the Company undertakes specific kinds of asset sales and does not use the related sale proceeds for specified purposes, the Company may be required to offer to repurchase the 2016 Senior Unsecured Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any. In certain circumstances, if any gaming regulatory authority requires a holder or beneficial owner of the 2016 Senior Unsecured Notes to be licensed, qualified or found suitable under applicable gaming laws, and such holder or beneficial owner does not obtain such license, qualification or finding of suitability within a specified time, the Company can require such holder or beneficial owner to dispose of its 2016 Senior Unsecured Notes or call for redemption of the 2016 Senior Unsecured Notes held by such holder or beneficial owner at a price equal to accrued and unpaid interest, if any, plus the lesser of 100% of the principal amount thereof or the price paid for such notes by such holder or beneficial owner. The 2016 Senior Unsecured Notes are unsecured, unsubordinated obligations of the Company, and are guaranteed by certain of the Company’s restricted subsidiaries. The 2016 Senior Unsecured Notes indenture contains certain covenants that, subject to certain significant exceptions, limit, among other things, the Company’s and certain of its restricted subsidiaries’ ability to incur additional debt, pay dividends or distributions, make certain investments, create liens on assets, enter into transactions with affiliates, merge or consolidate with another company or transfer and sell assets. The 2016 Senior Unsecured Notes indenture also includes events of default, including, but not limited to, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay certain other indebtedness the occurrence of which is caused by a failure to pay principal, premium or interest or results in the acceleration of such indebtedness, certain events of bankruptcy and insolvency and certain judgment defaults. Line of Credit In October 2016, in connection with the new Senior Secured Credit Facilities, the Company entered into a $25.0 million revolving credit facility with Bank of America, N.A. (the “Line of Credit”). The Line of Credit is coterminous with the Senior Secured Credit Facilities. Pursuant to provisions of the Senior Secured Credit Facilities, under certain circumstances, the Line of Credit may be converted into loans under the Senior Secured Credit Facilities. Each advance accrues interest at a base rate plus a spread. As of September 30, 2020, no amounts were drawn on the Line of Credit. The Line of Credit contains negative covenants and financial maintenance covenants that are substantially the same as those contained in the Senior Secured Credit Facilities. MGE Niagara Resorts Credit Facilities In June 2019, MGE Niagara entered into a Credit Agreement with, among others, Bank of Montreal, as Administrative Agent, and the lenders party thereto (the “MGE Niagara Resorts Credit Agreement”), providing for senior secured credit facilities in the aggregate principal amount of 290.0 million Canadian dollars ($217.0 million as of September 30, 2020) (the “MGE Niagara Resorts Credit Facilities”), comprised of a revolving credit facility in the amount of 190.0 million Canadian dollars ($142.2 million as of September 30, 2020) (the “MGE Niagara Resorts Revolving Facility”) and a term loan facility in the amount of 100.0 million Canadian dollars ($74.8 million as of September 30, 2020) (the “MGE Niagara Resorts Term Loan Facility”). The MGE Niagara Resorts Credit Facilities mature on June 10, 2024. In July 2019, MGE Niagara entered into an amendment to the MGE Niagara Resorts Credit Facilities to increase the borrowing capacity under the MGE Niagara Resorts Revolving Facility by 10.0 million Canadian dollars ($7.5 million as of September 30, 2020). On March 16, 2020, the OLG directed the MGE Niagara Resorts to close due to COVID-19. On May 15, 2020, MGE Niagara entered into a Limited Waiver (the “Limited Waiver”) with respect to the MGE Niagara Resorts Credit Facilities. The Limited Waiver, among other things: (i) waived the occurrence of an event of default that would have been caused under the MGE Niagara Resorts Credit Facilities due to the closure of the MGE Niagara Resorts for a period of 60 consecutive days or more and (ii) extended the waiver period through June 15, 2020 (the “Initial Waiver Period”). In exchange for the waivers granted under the Limited Waiver, MGE Niagara agreed not to make any request for advances under the MGE Niagara Resorts Credit Facilities during the Initial Waiver Period. Because the MGE Niagara Resorts were required to continue to remain closed as directed by the OLG through the Initial Waiver Period, MGE Niagara entered into an Amended and Restated Limited Waiver (the “Amended and Restated Limited Waiver”) on June 15, 2020 which, among other things, extended the Initial Waiver Period to July 15, 2020 (the “Extended Waiver Period”). On June 30, 2020, MGE Niagara entered into a Second Amended and Restated Limited Waiver (the “Second Waiver”) which, among other things: (i) waived anticipated breaches of certain financial covenants under the MGE Niagara Resorts Credit Facilities as a result of the closure of the MGE Niagara Resorts until July 31, 2020 (the “Covenant Waiver”), (ii) waived the requirement for MGE Niagara to deliver a compliance certificate under the MGE Niagara Resorts Credit Facilities for the fiscal quarter ending June 30, 2020 (the “Certificate Waiver”) and (iii) extended the Extended Waiver Period to July 31, 2020 (the “Second Extended Waiver Period”). In connection with the Second Waiver, MGE Niagara agreed, among other things, during the Second Extended Waiver Period, to: (i) continue not to make any request for advances under the MGE Niagara Resorts Credit Facilities, (ii) an increase in the Applicable Margin (as defined under the MGE Niagara Resorts Credit Facilities) to pricing level 4, a 50 basis point increase over pricing level 3 and (iii) not make certain Distributions (as defined under the MGE Niagara Resorts Credit Facilities). On July 31, 2020, MGE Niagara entered into a Third Amended and Restated Limited Waiver (the “Third Waiver”) which, among other things, extended: (i) the Covenant Waiver, (ii) the Certificate Waiver and (iii) the Second Extended Waiver Period to September 30, 2020 (the “Third Extended Waiver Period”). In connection with the Third Waiver, MGE Niagara agreed, among other things, during the Third Extended Waiver Period, to: (i) continue not to make any request for advances under the MGE Niagara Resorts Credit Facilities, (ii) replace the Applicable Margin schedule in the MGE Niagara Resorts Credit Facilities, which replacement schedule adds a new pricing level 5 increasing the Applicable Margin by 100 basis points over pricing level 4 and apply pricing level 5 as the current Applicable Margin, (iii) require MGE Niagara to maintain minimum liquidity of 15.0 million Canadian dollars, (iv) deliver to the administrative agent a weekly liquidity report and (v) refrain from making certain Distributions (as defined under the MGE Niagara Resorts Credit Facilities). On September 30, 2020, MGE Niagara entered into a Fourth Amended and Restated Limited Waiver (the “Fourth Waiver”) which, among other things: (i) waived anticipated breaches of certain financial covenants under the MGE Niagara Resorts Credit Facilities as a result of the closure of the MGE Niagara Resorts until November 30, 2020, (ii) waived the requirement for MGE Niagara to deliver (a) compliance certificates under the MGE Niagara Resorts Credit Facilities for the fiscal quarters ending June 30, 2020 and September 30, 2020 and (b) an annual business plan for the year ending March 31, 2020 and (iii) extended the waiver of the occurrence of an event of default that would have been caused under the MGE Niagara Resorts Credit Facilities due to the closure of the MGE Niagara Resorts, through November 30, 2020 (the “Extended Waiver Period”). In connection with the Fourth Waiver, MGE Niagara agreed, among other things, during the Extended Waiver Period, to: (i) continue not to make any request for advances under the MGE Niagara Resorts Credit Facilities, (ii) continue pricing under the MGE Niagara Resorts Credit Facilities at pricing level 5, which increased the Applicable Margin (as defined under the MGE Niagara Resorts Credit Facilities) by 100 basis points over pricing level 4, (iii) continue to require MGE Niagara to maintain minimum liquidity of 15.0 million Canadian dollars, (iv) continue to deliver to the administrative agent a weekly liquidity report and (v) refrain from making certain Distributions (as defined under the MGE Niagara Resorts Credit Facilities). The MGE Niagara Resorts Term Loan Facility is repayable, in quarterly installments, at a rate of 5.0 million Canadian dollars ($3.7 million as of September 30, 2020) per annum, commencing September 30, 2019. As of September 30, 2020, letters of credit issued under the MGE Niagara Resorts Revolving Facility totaled 35.0 Canadian dollars ($26.2 million as of September 30, 2020). Borrowings under the MGE Niagara Resorts Credit Facilities accrue interest at a base rate plus a spread. As of September 30, 2020, the 35.0 Canadian dollars ($26.2 million as of September 30, 2020) outstanding under the MGE Niagara Resorts Revolving Facility accrue interest at 5.95%. As of September 30, 2020, outstanding borrowings under the MGE Niagara Resorts Term Loan Facility accrue interest at 5.48%. MGE Niagara is also required to pay leverage-based undrawn commitment fees of between 75 and 125 basis points under the MGE Niagara Resorts Revolving Facility. As of September 30, 2020, the commitment fee under MGE Niagara Resorts Revolving Facility was 125 basis points. MGE Niagara is an unrestricted subsidiary under the Company’s existing credit facilities and indenture and the MGE Niagara Resorts Credit Facilities are non-recourse to the Company and its restricted subsidiaries thereunder. The MGE Niagara Resorts Credit Facilities are secured by, among other things, substantially all of the properties and assets of MGE Niagara, subject to certain customary exceptions, as well as by a pledge of (i) all of the issued and outstanding shares of MGE Niagara and (ii) a convertible debenture held by a third-party investor. The MGE Niagara Resorts Credit Agreement contains customary covenants applicable to MGE Niagara, including covenants governing: incurrence of indebtedness, incurrence of liens, payment of dividends and other distributions, asset sales, acquisitions and investments, affiliate transactions and fundamental changes. The MGE Niagara Resorts Credit Agreement also includes financial maintenance covenants pertaining to total leverage and fixed charge coverage. In addition, the MGE Niagara Resorts Credit Agreement contains customary events of default relating to, among other things, failure to make payments, breach of covenants and breach of representations. MGE Niagara Resorts Convertible Debenture In June 2019, MGE Niagara issued a convertible debenture (the “MGE Niagara Resorts Convertible Debenture”) to a third-party investor (the "Convertible Debenture Holder") in an aggregate principal amount of 40.0 million Canadian dollars ($29.9 million as of September 30, 2020). The MGE Niagara Resorts Convertible Debenture is convertible, at the option of the Convertible Debenture Holder, between the fourth and sixth anniversaries of the Closing Date, into Class B Special shares representing 40% of the capital of MGE Niagara. The Class B Special shares will be similar in nature to the existing Common shares. The MGE Niagara Resorts Convertible Debenture accrues interest at an annual rate of 3.50% prior to the sixth anniversary of the Closing Date and 8.00% thereafter, compounded annually. The first interest payment is payable on June 11, 2022, with annual payments due thereafter. Repayment of the outstanding principal, plus any accrued interest, is due thirty days following the expiration or the termination of the COSA. If the MGE Niagara Resorts Convertible Debenture is not converted as of the sixth anniversary of the Closing Date, either MGE Niagara or the Convertible Debenture Holder may elect early repayment of half of the principal outstanding as of such date. Mohegan Expo Credit Facility In April 2017, the Company, through its wholly-owned subsidiary, Mohegan Expo Center, LLC (“Mohegan Expo”), entered into a loan agreement with certain third-party lenders providing for a $25.0 million tax-exempt senior secured multi-draw term loan with an $8.3 million increase option (the “Mohegan Expo Credit Facility”). In September 2017, Mohegan Expo exercised the Mohegan Expo Credit Facility increase option. The proceeds from the Mohegan Expo Credit Facility were used to partially finance the construction of an $80.0 million exposition and convention center (the “Earth Expo & Convention Center”). The Earth Expo & Convention Center opened in May 2018. For the fiscal years ended September 30, 2020, 2019 and 2018, Mohegan Expo generated net revenues totaling $3.5 million, $6.0 million and $647,000 respectively, and loss from operations totaling $1.4 million, $81,000 and $1.6 million, respectively. The Mohegan Expo Credit Facility matures on April 1, 2022. The Mohegan Expo Credit Facility is repayable with an initial payment of $1.1 million for the period from April 18, 2018 through September 30, 2018 commencing on October 1, 2018 and in quarterly installments, at a rate of $2.5 million per annum, thereafter. As of September 30, 2020, outstanding borrowings under the Mohegan Expo Credit Facility accrue interest at 4.08%. Mohegan Expo is required to maintain a six-month debt service reserve in a designated account under the Mohegan Expo Credit Facility. The Mohegan Expo Credit Facility is a senior secured obligation of Mohegan Expo, collateralized by all existing and future assets of Mohegan Expo. The Mohegan Expo Credit Facility subjects Mohegan Expo to certain covenant requirements. Guaranteed Credit Facility In September 2018, the Company entered into a loan agreement with certain third-party lenders providing for a $23.7 million term loan secured by a 90% loan guarantee by the Department of the Interior, Assistant Secretary—Indian Affairs, Division of Capital Investment (the “Guaranteed Credit Facility”), pursuant to the Indian Loan Guaranty, Insurance and Interest Subsidy Program (the “BIA Loan Guaranty Program”). In October 2018, the Company entered into a follow-on loan agreement providing for an additional $11.3 million term loan under the BIA Loan Guaranty Program. This additional term loan completes the allocation to the Company of $35.0 million in guaranteed term loans under the BIA Loan Guaranty Program. The proceeds from the Guaranteed Credit Facility were used to reimburse certain costs relating to the Earth Expo & Convention Center. The Guaranteed Credit Facility matures on October 1, 2023. The Guaranteed Credit Facility, is repayable, in quarterly installments, at a rate of $2.6 million per annum, commencing January 1, 2019. As of September 30, 2020, outstanding borrowings under the Guaranteed Credit Facility accrue interest at 2.91%. The Guaranteed Credit Facility subjects the Company to certain covenant requirements. Mohegan Tribe Subordinated Loan Substantially concurrently with entering into the Fourth Amendment, the Mohegan Tribe made a $5.0 million subordinated loan to the Company. This loan matures on October 16, 2024 and bears interest in-kind at 10% per annum. Redemption Note Payable The Redemption Note Payable matures on April 14, 2024. The Redemption Note Payable is payable in monthly installments of $1.9 million over a five-year period, commencing in May 2019 (refer to Note 5). Debt Covenant Compliance As of September 30, 2020, the Company was in compliance with all financial covenants. |
