Pinnacle Entertainment has a new amended and restated $400 million credit facility that will give the company greater flexibility and improved prices. The casino operator will use the liquidity available in the new facility to build new projects in Louisiana and Missouri, to refinance some bonds and for general corporate purposes, Capp added. "The loan market is very aggressive right now. There is a lot of money looking for work and I think the company has accomplished a good deal," said Steve Capp, Pinancle's cfo.
The new financing includes a $75 million revolver, a $170 million funded term loan and a $50 million delayed draw term loan. The previous facility consisted of a $75 million revolver, a $147 million funded term loan and a $50 million delayed drawn term loan. The facility reduces the company's borrowing cost by 50 basis points from LIBOR plus $3 1/2 to LIBOR plus 3%. Pinnacle was only aiming to borrow $350 million, but because of significant oversubscription, the company decided to increase its borrowings by $50 million, Capp noted. "Our core properties are performing in a very solid way, so we have gained some additional confidence from the loan market, which was willing to put a bigger deal in place for us at a cheaper interest rate," he said.
Lehman Brothers and Bear Stearns are leading the deal. According to Capp, the decision to put in place the new deal was part of an ongoing conversation between Pinnacle and its bank group. Lehman and Bear Stearns also led Pinnacle's previous financing.