Over $1 billion in commitments have rolled in for Venetian Casino Resort's $760 million "B" loan, with investors betting the spread on the institutional tranche is likely to flex down 50 basis points to LIBOR plus 2 1/4%. The $215 million pro rata is being talked at LIBOR plus 2 1/2%. A bank meeting was held last Monday at the Venetian in Las Vegas (LMW, 6/16). A New York meeting was held last Wednesday at the St. Regis Hotel. Goldman Sachs is leading the credit and Scotia Capital is the administrative agent.
Investors are pumped up about the deal. "We think that's a pretty good property so we're happy with that," one buysider commented. "It's a big liquid deal with a credit that people understand very easily," another loan investor commented. But he also noted that the credit agreement is going to be very loosely structured. Despite this he expects everyone will still buy in. A banker responded by saying he does not think the covenants are going to be any looser than the terms the company already has in the existing facility.
The senior debt comprises a $125 million revolver, $90 million delay-draw "A" loan, $105 million delay-draw "B" loan and $655 million "B" loan. Proceeds are being used to finance the Venetian's Palazzo casino resort project and refinance existing debt. Goldman bankers declined comment.