Greektown Casino is preparing to launch a $425 million debt financing after Labor Day. Bruce Dall, cfo in Detroit, said proceeds will go toward paying down various forms of debt, including bank loans that the company has outstanding and finance the construction of a new gaming facility.
Dall said the company is considering issuing $200 million in senior notes, which will either be publicly offered or done under the 144A registration rights rules. There may be more benefits to paying a slightly higher coupon to avoid a filing process via the Securities and Exchange Commission, he said. Dall also said that while the bank market is offering favorable rates now, he is interested in having part of the financing done with longer-term paper that will match the length of time it will take to build a new casino.
In addition, Greektown is eyeing the sale of $135 million in four or five-year term notes. The offering will probably be sole-led by Merrill Lynch.
The combined proceeds will go towards paying down $175 million in existing bank debt. The company has a $117 million term loan "B," and has also borrowed on its $100 million revolver. Greektown will also pay minority shareholders $150 million for their stake in the company. Merrill, KeyBank and National City Bank lead Greektown's current bank facility.