Mikohn to issue 8.4 million shares to retired $40 million 11 7/8% notes

New York, Sept. 26 - Mikohn Gaming Corp. said it will sell 8.4 million shares and warrants and use proceeds to purchase $40 million of its 11 7/8% senior secured notes due August 2008.

The notes will be bought back at a price of 104% of par.

The stock will be sold at $5.34 per share. The warrants will cover 2.1 million shares of Mikohn's stock and have an exercise price of $5.88 per share.

The Las Vegas supplier to the gaming industry said the transaction will cut its cash interest payments by $4.8 million to $7.7 million per year.

"The completion of this significant deleveraging transaction, which will reduce our debt from approximately $105.7 million to approximately $65.7 million, and the subsequent reduction in annual cash interest payments from approximately $12.5 million to approximately $7.7 million will be an important milestone for Mikohn," said Russ McMeekin, Mikohn's president and chief executive officer, in a news release.

"The resulting improved balance sheet will improve cash flow, allowing us to continue to focus on our strategic initiatives, address the growth goals for our business and to further enhance shareholder value."

On Sept. 10, Mikohn said it was evaluating "various strategies" to recapitalize its balance sheet.

Majestic Star, Majestic Investor get noteholder consents in tender offers

New York, Sept. 26 - Majestic Star Casino LLC (B2/B) and its Majestic Investor Holdings LLC (B2/B) unit said they had received the requisite amount of noteholder consents to proposed indenture changes from the holders of Majestic Star's 10 7/8% senior secured notes due 2006 and Majestic Investor Holdings' 11.653% senior secured notes due 2007, as part of their previously announced respective tender offers.

Both consent solicitations expired as scheduled at 5 p.m. ET on Sept. 25, with no further extension. As of that deadline, holders had tendered $74.639 million of the 10 7/8% notes, or 57.4% of the outstanding principal amount, and had tendered $135.477 million of the 11.635% notes, or 89.3% of the outstanding principal amount.

Both Majestic Star and its subsidiary said that they planned to execute supplemental indentures incorporating the desired changes, although these would not take effect until the tendered notes were accepted for purchase and paid for. Following that, the supplemental indentures would become binding on all remaining outstanding notes of each respective series.

As previously announced, Majestic Star Casino, a Gary, Ind.-based gaming operator, announced a cash tender offer for its $130 million of outstanding 10 7/8% notes on Aug. 26, while its Majestic Investor Holdings subsidiary, along with Majestic Investor Capital Corp., concurrently announced a separate cash tender offer for Majestic Investor Holdings' $151.767 million of remaining outstanding 11.653% notes (out of the $152.6 million sold in November, 2001).

The companies initially set consent deadlines for their respective offers of 5 p.m. ET on Sept. 10, and said each offer would expire at 5 p.m. ET on Sept. 24 (all of the deadlines were subsequently extended).

Majestic Star said it would offer $1,054.38 per $1,000 principal amount of the 10 7/8% notes, including a consent payment of $5 per $1,000 principal amount for holders tendering by the consent deadline; holders tendering after the consent deadline but before the tender expiration deadline will receive $1,049.38 per $1,000 principal amount. Majestic Star will also pay accrued interest up to but not including the date of payment.

The consent solicitation is to amend the indenture and release liens on the collateral securing the notes. The indenture amendment would eliminate substantially all the restrictive covenants and amend certain other provisions. The company said a majority would be needed to pass the changes.

Majestic Investor Holdings meantime initially said it would offer $1,050.00 per $1,000 principal amount of the 11.653% notes, including a consent payment of $5 per $1,000 principal amount for holders tendering by the consent deadline (the total consideration was subsequently raised to $1,090 per $1,000 principal amount, including the consent fee, which was also raised to $30 per $1,000 principal amount). It initially said that holders tendering after the consent deadline, but up to the tender expiration deadline would receive $1,045.00 per $1,000 principal amount (this consideration was also subsequently raised, to $1,060 per $1,000 principal amount) Majestic Investor Holdings will also pay accrued interest up to, but not including the date of payment.

The consent solicitation seeks to amend the indenture, terminate guarantees and release liens on the collateral securing the notes. Majestic Investor said the indenture amendment would eliminate substantially all the restrictive covenants and amend certain other provisions. It said that a majority would be needed to pass the changes and the consent of two thirds of the principal amount outstanding would be needed to release the liens.

For both offers, the companies said that tendering holders would be required to deliver consents, and consents could only be given on notes that had been tendered. The companies said on Sept. 19 that holders of either series of notes who had tendered their notes and had delivered the related consents by the Sept. 18 consent deadline would still be able to withdraw their tenders and revoke their consents at any time up to the new consent deadlines, but not after that. And they said that any notes tendered (and consents delivered) after 5 p.m. ET on Sept. 18 would have no withdrawal rights.

Both offers are conditional on the receipt of consents and the completion of related financing transactions by Majestic Star.

Documentation is available from MacKenzie Partners, Inc. (call 800 322-2885), the information agent for the tender offers. The depositary is The Bank of New York.

Pinnacle Entertainment accepts early tenders of 9½% notes

New York, Sept. 26 - Pinnacle Entertainment, Inc. (Caa1/CCC+) said that it has accepted and purchased the $60.999 million aggregate principal amount of its 9½% senior subordinated notes due 2007 tendered to the company by 5 p.m. ET on Sept. 19, the early tender date under Pinnacle's previously announced tender offer for the notes, which now continues and which is scheduled to expire on Oct. 3.

Tendering holders were paid an aggregate of approximately $63.3 million, representing $1,023.75 per $1,000 principal amount of tendered 9½% notes, plus accrued interest.

The company also announced that it has called for redemption all the remaining 9½% notes at a price of $1,023.75 per $1,000 principal amount, plus accrued and unpaid interest up to but not including the redemption date of Oct. 27. As of Sept. 25, $64.001 million of the 9½% notes remained outstanding.

As previously announced, Pinnacle, a Las Vegas-based gaming company, said on Sept. 9 that it had a begun a cash tender offer for all of its $125 million of outstanding 9½% notes.

It set midnight ET on Oct. 3 as the expiration date, subject to possible extension, and said that it was offering $1,023.75 per $1,000 principal amount for notes tendered by the early tender date of 5 p.m. ET on Sept. 19, or $1,003.75 per $1,000 principal amount for notes tendered after that date but before the expiration date.

Pinnacle said it would also pay accrued interest up to but not including the payment date.

It said that funding for the tender would come through a debt financing of approximately $130 million (Pinnacle sold $135 million of new 8¾% senior subordinated notes due 2013 on Sept. 19, and the deal officially closed on Sept. 25).

Pinnacle said that following completion of the debt financing, it planned to redeem any notes not tendered and purchased.

The notes are currently redeemable at $1,023.75 per $1,000 principal amount.

The company said the tender would be is subject to various conditions, including completion of the debt financing

Bear, Stearns & Co. Inc. (contact global liability management group at 877 696-2327) is the dealer manager; The Bank of New York is the depositary agent and D.F. King & Co., Inc. (800 758-5378) is the information agent.

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