American Casino plans $375 million five-year notes, pricing next week

By Paul Deckelman

New York, Aug. 3 - American Casino & Entertainment Properties LLC announced plans Monday to sell $375 million of new five-year senior secured notes.

The deal will be brought to market via bookrunning manager Goldman Sachs & Co. It is being marketed to potential investors via a roadshow process that kicked off with a New York investors' luncheon on Monday, with pricing expected to take place next week, possibly around mid-week, a primaryside source said.

The notes from the owner of the towering Stratosphere casino resort in Las Vegas and three other Nevada casino properties will be non-callable for the first three years after issue. They will be sold under Rule 144A with registration rights, as well as under Regulation S. They will be issued by parent American Casino and by the company's wholly-owned subsidiary, ACEP Finance Corp., and will be guaranteed on a senior secured basis by all of American Casino's wholly owned domestic subsidiaries other than ACEP Finance Corp.

The company plans to use the proceeds of the bond sale to refinance its senior secured term loan from Goldman Sachs. American Casino originally entered into several term loan instruments due 2010 with Goldman in early 2008 upon its $1.2 billion purchase by Whitehall Street Real Estate Funds - a Goldman-managed investment fund - which bought American Casino from its then-owner, American Real Estate Partners, controlled by billionaire investor Carl C. Icahn.

This past June, with the company experiencing financial difficulties due to the heavy debt burden from its loans as well as declining revenue numbers, in line with a major downturn throughout the gaming industry, Goldman restructured those loans into a single term loan due in 2014, essentially forgiving much of the debt it was owed. Goldman established a fair value for the 2014 loan of approximately $350 million as of June 30, according to American Casino's second quarter 10-Q report filed with the Securities and Exchange Commission on Monday.

Besides the Statosphere , whose 1,000-foot-plus observation tower on the Las Vegas Strip dominates the city's gaudy nighttime skyline, the Las Vegas-based company also owns and operates two off-Strip Arizona Charlie's casinos, and the Aquarius casino resort in Laughlin, Nev., about 90 miles south of Las Vegas.

© 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.