CIBC World Markets, Bank of America and Wells Fargo rolled out a $650 million credit for Borgata Hotel Casino and Spa at a meeting held at the property last week. The credit refinances existing debt and increases the size of the facility to help fund an expansion. "Obviously, the property has done well in its first year and we had a large bank group that helped us build the property," said Paul Chakmak, senior v.p. finance and treasurer of Boyd Gaming, which manages the property. "We're looking to use those folks and expand on it for the refinancing of the existing debt as well as provide the funds for the expansion of the property that we announced."
The credit comprises a five-year, $450 million revolver and seven-year, $200 million "B" loan. Both tranches are being offered at LIBOR plus 2%, but the revolver will be subject to a leverage-based grid, Chakmak noted. The existing credit was originally $630 million and was a construction loan facility that was put in place to build the property. It has since been paid down to about $480 million with excess cash flow, Chakmak added.
CIBC is the administrative agent on the credit. Bank of Nova Scotia and Deutsche Bank are acting as co-documentation agents. CIBC bankers did not return calls. Boyd Gaming and MGM Mirage each own 50% of Borgata, but Boyd manages the property. The $200 million property expansion will provide additional gaming, nightclub and restaurant facilities. Construction is expected to begin in December and be completed in the second quarter of 2006.