Herbst Gaming tenders for 10¾% notes

New York, May 13 - Herbst Gaming, Inc. said it has begun a cash tender offer and consent solicitation for any and all of its $217 million outstanding 10¾% senior secured notes due 2008.

The Las Vegas gaming firm said the offer will expire at 5 p.m. ET on June 10 while the consent solicitation will expire at 5 p.m. ET on May 24.

Holders tendering will be required to consent to amendments to the note indenture which will, among other things, eliminate substantially all of the restrictive covenants. Holders also may not deliver consents without tendering.

The price in the tender offer will be set on June 8.

The total amount will be set according to a 50 basis points spread over the yield to maturity of the 2% U.S. Treasury note due Aug. 31, 2005, based on the call price of $1,053.75 per $1,000 principal amount on the notes' first call date of Sept. 1, 2005.

The total will include a $30 per $1,000 principal amount consent payment only payable to holders who tender by the consent deadline.

The tender Offer is subject to various conditions, including holders tendering at least a majority of the principal amount of the notes outstanding and the company obtaining financing on acceptable terms.

Lehman Brothers Inc. is dealer manager and solicitation agent (800 438-3242 or call collect or 212 528-7581). D.F. King & Co., Inc. is information agent and tender agent (800 431-9642 or call collect 212 269-5550).

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