Boyd Gaming Corp. has tapped Bank of America, CIBC World Markets and Wells Fargo Bank to lead the $1.5 billion bank facility backing its $1.3 billion merger with Coast Casinos. "B of A, CIBC and Wells Fargo are the leaders in the gaming industry as far as doing bank deals [and we have] long standing institutional relationships with all three," noted Paul Chakmak, Boyd's treasurer. Crédit Lyonnais and Deutsche Bank are co-documentation agents on the deal. Deutsche Bank advised Boyd on the transaction while B of A advised Coast (LMW, 2/16). CIBC is the lead on Boyd's existing credit facility and the company has also worked with Wells Fargo and B of A in the past, Chakmak previously told LMW.
The deal comprises a five-year, $1 billion revolver and seven-year, $500 million "B" loan. Both tranches are priced at LIBOR plus 2%. "CLOs will use it to improve ratings tests," a buysider said. "How else can you rationalize paying LIBOR plus 2%?" The revolver includes a $30 million letter of credit sub-facility and a $30 million swing-line facility.
In addition to the bank facility, Boyd did a 10-year bond deal for $350 million at 63/4%. The bond proceeds will initially be used for general corporate purposes, Chakmak said. Outstanding debt is expected to be around $2.3 billion and total leverage is around 5.2 times. The bank meeting was held April 14 in Las Vegas. CIBC and Wells Fargo bankers did not return calls and a B of A spokeswoman declined comment.