Bear Stearns and Merrill Lynch have landed the lead roles on an $800 million bank debt financing backing Penn National Gaming's acquisition of Hollywood Casino. The choice of Merrill and Bear is seen as a major coup for the banks as they edged out Lehman Brothers, which acted as the adviser to Penn. "Merrill and Bear laid a better mousetrap than Lehman," one banker said, noting that the duo has prior investment banking relationships with Penn. Bankers at all three firms declined to comment.
The credit is likely to include a large institutional piece--rumored to be $600 million--with the remainder structured as a $100 million revolver and a $100 million "A" term loan. The facility is likely to be syndicated in the fall, with the merger requiring regulatory and shareholder approval, according to bankers familiar with the deal. Calls to William Clifford, cfo of Penn, were not returned.