Jamul Indian Village completes $460 million refinancing facilities

By Marisa Wong

Morgantown, W.Va., Oct. 20 – An affiliate of the Jamul Indian Village of California, Jamul Indian Village Development Corp., obtained $460 million of long-term secured financing consisting of revolving and term loan credit facilities on Oct. 20, according to an 8-K filing with the Securities and Exchange Commission.

The company completed the refinancing facilities in connection with the recent opening of the Hollywood Casino Jamul – San Diego on the reservation in Jamul, Calif., according to a news release.

Citizens Bank, Fifth Third Bank and Goldman Sachs acted as joint lead arrangers.

The credit facilities, all due in 2022, include a $5 million revolver, a $340 million term loan B and a $98 million term loan C, according to the 8-K filing.

The revolver will be provided by various commercial banks; the term loan B will be held by an affiliate of Och-Ziff Real Estate; and the term loan C will be held by San Diego Gaming Ventures, LLC, a subsidiary of Penn National Gaming, Inc. and the developer of the casino project.

San Diego Gaming will also provide up to an additional $15 million of delayed draw term loan C commitments to fund some roadway improvement costs.

The credit facilities rank pari passu with each other. However, if, on the first anniversary of the opening of the casino, Jamul Indian Village has not achieved a senior secured net leverage ratio equal to or less than 5.0 to 1.0, then all or a portion of the term loan C will become subordinated to the other facilities to the extent necessary so that, after giving effect to the conversion, the senior secured net leverage ratio is 5.0 to 1.0.

Interest is equal to Libor plus 983 basis points for the term loan B, Libor plus 850 bps for the term loan C and Libor plus 950 bps for the revolver. The revolver has a 0% Libor floor, and the term loans have 1% Libor floors.

Any prepayment of the term loan B prior to the 45-month anniversary of the closing date will be subject to the following prepayment penalties: for the first 21 months, the interest payments from the date of prepayment to the 21-month anniversary of the closing date, plus 4% of the amount prepaid; for the next 12 months, 4% of the amount prepaid; and after 33 months, 1% of the amount prepaid.

The tribe intends to use proceeds from the refinancing to repay development costs – including those advanced by Penn National Gaming – to retire tribal debt and for working capital, according to the press release.

Since 2012, Penn National has provided about $331 million of financing for development and construction of the casino and the acquisition of tribal debt. The tribe has repaid about $274 million of the capital advanced by Penn National.

Penn National will continue to provide a portion of the project’s financing, including a term loan C facility of up to $108 million and a term loan C delayed draw commitment of up to $15 million, according to the press release.

Of the delayed-draw loans, $10 million may be funded as part of the term loan C that closed on Thursday, according to the filing. These loans will bear interest at Libor plus 850 bps with a 1% Libor floor. The remaining $5 million will be subordinated loans to cover incremental project costs and will bear interest at 14%, with 12% payable in cash and 2% in kind.

Jamul Indian Village of California is a federally recognized Indian tribe.

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