Trump $500 million exit facility to launch Thursday

By Sara Rosenberg

New York, April 12 - Trump Hotels & Casinos Resorts Inc. is scheduled to hold a bank meeting on Thursday in Atlantic City, N.J., to launch its proposed $500 million exit financing facility, according to a market source.

Morgan Stanley & Co. Inc. and UBS Investment Bank are joint lead arrangers on the deal, with Morgan Stanley the left lead.

The facility consists of a $200 million revolving credit facility, a $150 million delayed-draw term loan and a $150 million term loan B, with all three tranches talked at Libor plus 250 basis points, the source said.

Security is a first priority lien on substantially all company assets.

Proceeds will be used to fund immediate capital improvements, as well as certain expansion projects, at current properties, and provide financial resources to potentially invest in additional jurisdictions.

The facility is being sought after in connection with the company's recapitalization plan, under which it was required to file for Chapter 11. Trump anticipates emerging from bankruptcy in early May as Trump Entertainment Resorts Inc. The company filed for bankruptcy on Nov. 22.

Under the reorganization plan, Trump Hotels & Casino Resorts Holdings LP and Trump Hotels & Casino Resorts Funding Inc. would issue new 8.5% 10-year notes to help replace some of the company's existing bonds. These new notes are secured by substantially all real property and incidental personal property and some other assets, subject to liens securing the $500 million exit facility.

Holder of the approximately $1.3 billion Trump Atlantic City Associates notes would get about $777.3 million of new notes, about $384.3 million of common stock and an additional amount in cash equal to simple interest accrued on about $777.3 million of new notes at the annual rate of 8.5% from the last scheduled date to which interest was paid with respect to the Trump Atlantic City notes through the effective date of the plan.

Holders of the approximately $425 million Trump Casino Holdings first priority notes would get about $425 million of new notes, $21.25 million in cash, about $8.5 million of common stock and an additional amount in cash equal to simple interest accrued on $425 million at the annual rate of 12.625% through the effective date of the plan.

Unaffiliated holders of the approximately $54.6 million Trump Casino Holdings second priority notes would get about $47.7 million of new notes, about $2.3 million in cash, about $2.1 million of common stock and an additional amount in cash equal to simple interest accrued on $54.6 million at the annual rate of 18.625% from the last scheduled date to which interest was paid with respect to the Trump Casino Holdings second priority notes to the date that is 90 days after the petition date for the Chapter 11 cases and about $47.7 million at the annual rate of 8.5% from the 91st day after the petition date through the effective date of the plan.

Lastly, existing common stockholders would receive nominal amounts of common stock of the recapitalized company.

Trump Hotels is an Atlantic City, N.J., hotel and casino owner and operator.

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