Eldorado Resorts $600 million junk offer backing Tropicana purchase to launch in September

By Paul A. Harris

Portland, Ore., Aug. 17 – Eldorado Resorts Inc. is expected to come to market with $600 million of high-yield notes in September, according to market sources.

The deal is part of a sizable mergers and acquisitions financing deal pipeline, a substantial portion of which is expected to roll out early in the post-Labor Day period, as autumn in the high-yield market gets underway, sources say.

J.P. Morgan Securities LLC will be the lead.

The Reno, Nev.-based casino entertainment company plans to use the proceeds to help fund its acquisition of Tropicana Entertainment Inc.

As reported, 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.

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

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.

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