The Mohegan Tribe announced Thursday it is offering $123 million in tribal and gaming authority bonds to build a 400-room hotel next to its Mohegan Sun resort casino in Uncasville.
The Mohegans have been talking about building a second hotel for their premier casino property since revenue problems stemming The Great Recession scrapped their larger Project Sunburst plans for an additional casino resort in Uncasville. Instead, the hotel will be a stand-alone facility meant to manage the overflow from the Mohegan Sun hotel.
The bonds are being offered in two forms, both utilizing the tribe’s sovereign status. Neither will be registered under the U.S. Securities Act and may not be offered or sold in the United States.
The first offering will be $102 million in Tribal Economic Development Bonds. The second offering will be $21 million in aggregate principal amount of Gaming Authority Priority Distribution Payment Bonds, which will have limited obligations to the tribe and instead be payable to the tribe’s gaming arm, Mohegan Tribal Gaming Authority.
The tribe expects both sets of bonds to be exempt from federal income tax.
In addition to the Uncasville casino, the tribe also owns and operates the Mohegan Sun at Pocono Downs in Pennsylvania and operates the Resorts Casino Hotel in Atlantic City.
