Eldorado gets $600 million financing commitment for Tropicana buy

By Sara Rosenberg

New York, April 16 – Eldorado Resorts Inc. has received a commitment for $600 million in financing to help fund its acquisition of Tropicana Entertainment Inc., company officials said in a conference call on Monday.

J.P. Morgan Chase Bank provided the commitment.

Ultimately the company plans to issue unsecured debt in the form of bonds to pay for the Tropicana purchase, officials continued.

Under the agreement, Gaming and Leisure Properties will pay $1.21 billion, excluding taxes and expenses, for substantially all of Tropicana’s real estate and enter into a master lease with Eldorado for the acquired real estate, and Eldorado will fund the remaining $640 million of cash consideration payable in the acquisition.

Other funds for the transaction will come from cash generated from current operations, proceeds from pending asset sales, Tropicana’s cash on hand and cash flow generated from Tropicana operations through closing.

Closing is expected by the end of this year, subject to regulatory approvals and other customary conditions.

Eldorado Resorts also announced on Monday that it is acquiring the Grand Victoria Casino in Elgin, Ill., for $327.5 million in cash, and will use borrowings under its revolving credit facility, cash from previously announced asset sales and cash from ongoing operations to fund the transaction.

However, officials added in the call that with the issuance of unsecured debt, the expectation is that the revolver will be undrawn pro forma for the close of the Tropicana and Grand Victoria acquisitions.

The Grand Victoria transaction is expected to close in the fourth quarter, subject to regulatory approvals and other customary conditions.

Reno, Nev.-based Eldorado Resorts and Las Vegas-based Tropicana Entertainment are casino entertainment companies.

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