Deutsche Bank and Goldman Sachs filled the books on the $1.06 billion facility for Resorts International Holdings as investors take a bet on the strength of gaming credits.
The loan consists of a five-year, $75 million revolver; an eight-year, $400 million second-lien and a seven-year, $585 million "B" term loan.
One banker said it has been a "massive blowout" and he expects pricing to decrease. Pricing is currently at LIBOR plus 3 1/4% for the revolver and term loan "B" and LIBOR plus 7% for the second-lien. "It's a testament to the strength of the market," he said. "It's also fair to say there are not an abundance of gaming assets to buy, so when you see one you like, you grab it and grab it big."
Private equity firm Colony Capital will use the loan to fund its acquisition of Harrah's East Chicago and Harrah's Tunica from Harrah's Entertainment and the Atlantic City Hilton and Bally's Saloon Tunica from Caesars Entertainment. Moody's Investors Service assigned a B2 rating to the revolver and term loan "B" and a B3 rating to the second-lien loan. A Colony spokesman declined comment.