Bear Stearns and Merrill Lynch will be launching this week retail syndication of the $800 million deal for Penn National Gaming as regulatory approval is set to clear in February for the gaming company's $780 million acquisition of Hollywood Casino Corp. The credit launched at the senior level in October, with Société Générale and Credit Lyonnais signing on at the agent level, said a banker familiar with the deal. Wells Fargo and Wachovia Bank have also signed on.
The line comprises a $600 million "B" loan, along with a $100 million revolver and a $100 million "A" piece. Reportedly, pricing was originally set at LIBOR plus 3% for the "B" and LIBOR plus 23/ 4% for the pro rata. However, the banker said that pricing could change at the retail level. Leverage multiples are 4.5 times, a different banker said. Bear Stearns officials declined to comment, while Merrill bankers did not return calls.
Bear Stearns and Merrill did not want to go out to retail and complete the credit too far in advance of the acquisition's approval, a banker explained. In order to complete the transaction, Penn National had to request approval from various authorities, including sanction from each state with casinos involved in the transaction. These include Illinois, Mississippi and Louisiana. "So regulatory approval took a while," he stated. William Clifford, Penn National's cfo, did not return calls for comment.