Eldorado Resorts shops $375 million eight-year senior notes as part of refinancing effort

By Paul Deckelman

New York, July 8 – Eldorado Resorts, Inc. announced plans on Wednesday to sell $375 million senior notes due 2023 as part of the Reno, Nev.-based regional gaming company’s larger refinancing plan, which will also include new bank debt and a stock sale.

Details were not immediately available on the timing of the prospective deal, whether it would be marketed to potential investors via a roadshow, the precise features of the bonds to be sold or the investment banks involved in the financing.

The bond deal will come to market under Rule 144A and Regulation S.

Eldorado is a casino and racetrack operator that was formed in its present, publicly traded incarnation by the merger last year of the then-privately held Eldorado Resorts LLC with the then-publicly traded sector peer MTR Gaming Group Inc.

The company plans to use the expected proceeds from the bond deal, along with proceeds from a proposed new $425 million term loan, borrowings from a proposed new $150 million revolving credit facility and the proceeds from a planned stock sale aimed at generating $60 million, plus cash on hand, for debt repayment, among other purposes.

Eldorado plans to repurchase and/or redeem all of Eldorado Resorts, Inc.’s outstanding 8 5/8% senior secured notes due 2019 issued by the pre-merger Eldorado Resorts LLC and Eldorado Capital Corp. and to repurchase and/or redeem all of the outstanding 11½% senior secured second-lien notes due 2019 issued by the pre-merger MTR Gaming Group.

Eldorado Resorts sold $180 million of the 8 5/8% notes in June of 2011, of which $168 million remained outstanding as of March 31. MTR Gaming sold $565 million of the 11½% notes in August of 2011, of which $560.66 million remained outstanding on Eldorado’s books as of March 31.

The company also plans to use a portion of the anticipated proceeds from the refinancing transactions to pay the $72.5 million purchase price for Eldorado to buy a pair of assets from Las Vegas-based gaming giant MGM Resorts International, under the terms of a transaction announced on Tuesday.

Eldorado will buy out MGM’s 50% stake in the Silver Legacy casino resort in Reno, which the two companies, or their corporate predecessors, have operated as a joint venture since 1995.

It will also acquire MGM’s separate Circus Circus casino resort in Reno.

Eldorado will additionally use some of the refinancing proceeds to repay all of the roughly $60 million currently outstanding on a net debt basis under the Silver Legacy joint venture’s credit facility, and to pay fees and costs associated with the aforementioned transactions.

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