Herbst Gaming amends loan, waiving non-compliance, changing covenants, upping spreads

By Sara Rosenberg

New York, Dec. 20 - Herbst Gaming Inc. amended its credit facility, waiving compliance with financial covenants for the fiscal quarter ended Sept. 30, revising covenants and increasing pricing, according to an 8-K filed with the Securities and Exchange Commission Thursday.

The senior debt to EBITDA (see table 1), total debt to EBITDA (see table 2) and interest coverage ratios (see table 3) were all modified.

Pricing on the facility is now set at Libor plus 400 basis points to 450 bps, depending on senior debt to EBITDA. Previously, the deal was priced at Libor plus 350 bps.

Also under the amendment, $60 million of outstanding revolving loans have been converted into term loans and the revolver size was reduced to $100 million from $175 million.

In addition, the accordion feature was eliminated.

Furthermore, the amendment allows the company to incur up to an additional $275 million of second-lien, senior or senior subordinated indebtedness, subject to certain terms.

The amendment was completed on Dec. 14.

Bank of America is the administrative agent on the deal.

Herbst is a Las Vegas-based slot route operator.

Table 1: Senior Debt to EBITDA Ratio

Period Maximum Senior Debt to EBITDA

Dec. 31, 2007 through Sept. 30, 2008 6.85:1.00

Dec. 31, 2008 through June 30, 2009 4.50:1.00

Sept. 30, 2009 and Dec. 31, 2009 4.30:1.00

March 31, 2010 and June 30, 2010 4.25:1.00

Sept. 30, 2010 and Dec. 31, 2010 4.00:1.00

March 31, 2011 and June 30, 2011 3.95:1.00

Sept. 30, 2011 and Dec. 31, 2011 3.90:1.00

March 31, 2012 and June 30, 2012 3.85:1.00

Sept. 30, 2012 and thereafter 3.65:1.00

Table 2: Total Debt to EBITDA Ratio

Period Maximum Total Debt to EBITDA

Dec. 31, 2007 through Dec. 31, 2008 9.65:1.00

March 31, 2009 and June 30, 2009 9.60:1.00

Sept. 30, 2009 and Dec. 31, 2009 9.25:1.00

March 31, 2010 and June 30, 2010 9.10:1.00

Sept. 30, 2010 and Dec. 31, 2010 8.60:1.00

March 31, 2011 and June 30, 2011 8.55:1.00

Sept. 30, 2011 and Dec. 31, 2011 8.50:1.00

March 31, 2012 and June 30, 2012 8.40:1.00

Sept. 30, 2012 and thereafter 8.00:1.00

Table 3: Interest Charge Coverage Ratio

Period Minimum Interest Charge Coverage

Dec. 31, 2007 through Dec. 31, 2008 1.10:1.00

March 31, 2009 through June 30, 2010 1.15:1.00

Sept. 30, 2010 through June 30, 2012 1.20:1.00

Sept. 30, 2012 and thereafter 1.25:1.00

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