Mohegan is taking further steps to untangle itself financially from South Korea’s INSPIRE Entertainment Resort, following the completion of a refinancing that significantly reduced the U.S. tribal casino operator’s exposure to the $1.6 billion integrated resort near Incheon International Airport. Company executives said the transaction has removed the most substantial remaining obligation linked to the troubled overseas investment, though limited legal and financial matters still require resolution.

The INSPIRE project has been under Bain Capital’s control since February, when the private investment firm accelerated remedies after a default by the resort’s operating entity, MGE Korea Ltd. Mohegan, which previously managed and invested in the property, lost operational control at that time and has since worked to limit the impact on its balance sheet.

Refinancing Reduces Major Credit Exposure

During Mohegan’s fourth-quarter and full-year fiscal 2025 earnings call, Chief Financial Officer Ari Glazer said the company understood that INSPIRE had completed a refinancing of its senior credit facility after the end of the quarter. According to Glazer, cited by Inside Asian Gaming, the refinancing included repayment of the original construction loan in early December.

“We understand that subsequent to the quarter end, INSPIRE completed a refinancing of its senior credit facility and that the original construction loan was fully repaid in early December,” Glazer said. “We believe this relieves Mohegan’s obligations under our US$100 million credit enhancement support agreement, however we’re still in the process of determining the exact legal status.”

That credit enhancement agreement had been viewed as a lingering concern for investors and lenders, particularly after Bain Capital assumed control of the property. CBRE Credit Research noted that the obligation had weighed on Mohegan’s credit profile since the ownership change and complicated the company’s own refinancing earlier in the year. The firm said removal of that exposure supports its Outperform recommendation on the company.

In addition to the refinancing, Glazer said approximately $21 million in letters of credit tied to Mohegan’s revolving credit facility have expired. Those letters had been associated with the Korean project and their expiration restores borrowing capacity for the company.

From Ambitious Expansion to Loss of Control

Mohegan’s involvement with INSPIRE stemmed from an effort to establish a major presence in the Asia-Pacific gaming market. The resort includes a casino with 150 table games and 373 slot machines, along with hotel rooms, dining venues, retail space, an indoor water park, an immersive indoor street attraction, and a 15,000-seat arena.

However, Mohegan defaulted on a $275 million Korea Term Loan issued by affiliates of Bain Capital and Serica Agency Limited late last year. In its fiscal 2025 report (pdf), the company stated that Bain notified Mohegan on Feb. 13, 2025, that it would be taking ownership and control of the property.

“Prior to the Korea Transition, we were neither actively marketing Inspire for sale nor had intentions to abandon Inspire,” the company said in its year-end report.

Following the takeover, Mohegan no longer held any equity in INSPIRE and ceased to benefit from the resort’s operating results. The company later recognized a $77.6 million gain related to the loss of control, but it remained responsible for certain contingent obligations tied to prior agreements.

The resort’s financial underperformance had already strained Mohegan’s results. Revenue projections fell short, in part because the casino could only serve foreign patrons, and non-gaming attractions did not generate the expected draw. For the 12 months ended Sept. 30, 2025, Mohegan reported a 9.5% decline in income from operations to $259.3 million, while total capital dropped from nearly $3.5 billion to $2 billion.

Leadership Response and Strategic Focus

Outgoing Chief Executive Officer Ray Pineault acknowledged that the Korean venture did not meet internal expectations. “We made the deliberate decision not to deploy further capital and as a result we are not currently an equity holder in the project,” Pineault said, adding that management acted to protect long-term value.

Elsewhere during the investor call, Pineault emphasized stronger performance at domestic operations and in online gaming. “The fiscal year we just completed represents one of the most successful and transformative periods in Mohegan’s history,” he said. “Our Connecticut business is performing at an exceptional level. Combined EBITDA for Mohegan Sun and Mohegan Digital exceeded $363 million, marking the strongest performance since 2007. This is a remarkable milestone and a testament to the strength of our strategy, brand, and team.”

Mohegan also implemented workforce reductions during the most recent quarter, though no positions were cut at Mohegan Sun. Glazer said the “workforce reductions will optimize our cost structure going forward.” The company’s liquidity benefited further from the August agreement to sell its WNBA franchise, the Connecticut Sun, to Stephen Pagliuca for $325 million. The team will continue playing at Mohegan Sun Arena through the 2026 season.

As Mohegan works through remaining legal questions tied to INSPIRE, executives have indicated the goal is to complete the separation and move past a challenging chapter in the company’s international expansion.