Resorts International Holding's second lien gained seven points to trade at 97 after the gaming company took steps to boost its profitability. The company is seeking an amendment to its bank debt after it violated covenants on its first and second-lien bank debt. Deutsche Bank and Goldman Sachs lead the credit.
The company is asking that its covenants are waived for 2006, and that minimum CAPEX and EBITDA requirements are instated. They are also asking that its revolver be reduced from $75 million to $50 million. As a part of the amendment, Colony Capital, the sponsor, will arrange a $30 million letter of credit facility to provide for liquidity. The first-lien holders are being offered 50 basis points of PIK interest for 2006 and the second-lien holders offered 200 basis points of PIK interest for 2006. Officials at Resorts International did not return calls seeking comment.