Greate Bay unit plans exchange offer for existing 11% notes

New York, Nov. 14 - Atlantic Coast Entertainment/ACE Gaming said that it would offer to exchange new debt plus cash for the outstanding 11% notes due 2005 issued by Greate Bay Hotel & Casino Inc.'s GB Property Funding Corp. subsidiary.

Atlantic Coast Entertainment, also a newly created subsidiary of Atlantic City, N.J.-based hotel and casino operator Greate Bay, said in a registration statement filed with the Securities and Exchange Commission that it would offer holders of the GB Property Funding an aggregate of up to $110 million principal amount of its 3% notes due 2008 for all of outstanding GB Property Funding 11% notes due 2005.

Atlantic Coast Entertainment said that it plans to offer $1,000 principal amount of the 3% note plus $100 cash per $1,000 principal amount of the 11% notes, and will also pay the 11% noteholders accrued and unpaid interest through the date the exchange is completed.

The exchange offer will commence as soon as is practicable after the registration offer becomes effective. No expiration deadline for the offer was yet set.

Concurrently with the exchange offer, Atlantic Coast Entertainment will also be soliciting consents from the 11% noteholders aimed at eliminating certain restrictive covenants in the notes' indenture, releasing the liens on the collateral securing the 11% notes, and approving the terms of the new indenture governing the new notes.

Among other conditions, the consent solicitation and exchange offer is conditioned upon Atlantic Coast Entertainment's receipt of valid consents and tenders from holders of at least a majority of the aggregate principal amount of the outstanding 11% notes. The holders of around 58% of the 11% notes have indicated their support of the transaction and their intent to tender for notes for exchange, and thereby consent to the amendments to the existing notes' indenture. The minimum tender condition would be satisfied upon the tender of the existing notes held by those holders.

Holders tendering their existing notes for exchange may withdraw their tenders until the expiration of the exchange offer. Holders of the 11% notes who tender into the exchange offer will automatically be deemed to have given their consent to the proposed amendments to the notes' indenture.

GB Holdings, Inc. has filed with the American Stock Exchange and the Securities and Exchange Commission an application to have the Existing Notes delisted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.