Affinity Gaming gets enough consents to amend 9% notes due 2018

By Toni Weeks

San Luis Obispo, Calif., July 28 – Affinity Gaming and Affinity Gaming Finance Corp. said it received consents from holders representing a majority of its outstanding 9% senior notes due 2018 and consequently entered into a supplemental indenture amending the indenture governing the notes, according to an 8K filing with the Securities and Exchange Commission.

The company began the consent solicitation on July 15 to amend the definition of change of control in the indenture governing the notes. As previously reported, it needed consents from holders of a majority in principal amount of the outstanding notes in order to adopt the proposed changes. Holders of record as of 5 p.m. ET on July 11 were eligible to participate.

The consent solicitation expired at 5 p.m. ET on July 24. The original deadline was 5 p.m. ET on July 21, but the company decided on July 18 to extend it.

In addition, the company announced on July 21 that it would increase the consent payment to $2.50 from $1.25 per $1,000 principal amount.

Proposed amendment

As previously reported, the proposed amendment provides that neither (a) the company’s and certain of its stockholders’ entry into a settlement agreement with Z Capital Partners, LLC and its affiliates nor (b) the formation of a “group” among all or some of the parties to the settlement agreement in connection with the settlement agreement or any other agreement currently in existence will constitute a change of control under the notes’ indenture.

Currently, the settlement agreement, if completed, may constitute a change of control because the stockholders party to the agreement may be deemed a “group” under the current definition of change of control.

Absent a waiver, the issuers may be required to make a change-of-control offer for the notes at a price in cash equal to 101% of par plus accrued interest.

If the consent solicitation is unsuccessful and the issuers must make a change-of-control offer, Affinity intends to condition that offer on the effectiveness of the settlement agreement and to condition the effectiveness of the settlement agreement on no more than a specified amount of notes (expected to be no greater than $15 million) being tendered in the change-of-control offer.

Credit Suisse Securities (USA) LLC (212 538-1862 or 800 820-1653) was the solicitation agent, and D.F. King & Co., Inc. (212 269-5550 for banks and brokers or 800 290-6427 for others, affinity@dfking.com) was the information and tabulation agent.

The gaming company is based in Las Vegas.

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