Isle of Capri Black Hawk completed an oversubscribed $210 million acquisition facility and Rex Yeisley, senior v.p. and cfo, attributed the credit's success more to the strength of the company than to hot market timing. "I'm not sure the timing's the best in the world. I think it has to do with the strength of the story," he said. Isle of Capri Black Hawk tapped lead bank CIBC World Markets for the facility, which launched last month, to partly back its $84 million acquisition of Colorado Central Station Casino and Colorado Grande Casino from International Game Technology. He said the casino company's performance made the deal "almost a no brainer." The company's leverage ratio should be under four times, post-acquisition.
Yeisley would not discuss the final structural details of the deal because it has not officially closed. But he confirmed it shapes up roughly as a three-year, $142 million "B" piece; a two-year, $40 million revolver; and a two-year, $28 million "A" loan. A banker familiar with the B1-rated deal said that pricing is LIBOR plus 4% for the "B" loan. He added that the credit's completion was noteworthy because it had to contend with Penn National Gaming's same sector, much larger $800 million deal that was concurrently in the market.
Yeisley noted that CIBC has been a long time relationship bank for the company, so Isle of Capri Black Hawk decided to stick with the lead for the new deal. "If it ain't broke, don't fix it," he said. Isle of Capri Black Hawk is the largest hotel casino in Colorado and is jointly owned by Isle of Capri Casinos and Nevada Gold & Casinos, which own 57% and 43%, respectively. The credit will be secured by a first priority perfected security interest in all the Isle of Capri Black Hawk assets and the capital stock and assets of the acquired properties.