Credit Suisse and Deutsche Bank were expected to hold a bank meeting last Friday to launch syndication of a $575 million credit facility for Kerzner International. The deal consists of a six-year, $175 million revolver; a seven-year, $150 million delay-draw term loan and a seven-year, $250 million term loan "B." Pricing could not be determined by press time.
The loan will be used by investors Colony Capital, Istithmar PJSC, Whitehall Street Real Estate Funds, The Related Companies and Providence Equity Partners to take the company private. The cost of the buyout is approximately $3.8 billion, including the assumption of $599 million of debt. The investors will pay $81 per share.
"You aren't getting paid for the risk," said one investor. "You're behind a $2.8 billion [commercial mortgage-backed security] facility and all you have is equity interest in their casinos and it's not large equity."
Bahamas-based Kerzner is an international developer and operator of destination resorts, casinos and luxury hotels, including its flagship brand Atlantis. John Allison, Kerzner's cfo, could not be reached. Calls to a Kerzner spokesman were not returned. Calls to a spokesman for the investor group were not returned.