Bear Stearns and Merrill Lynch closed the books on Penn National's $800 million acquisition credit, with about 55 accounts signing onto the deal. A banker familiar with the facility said a Feb. 10 price flex as well as some other credit changes led more investors to buy into the facility. The "B" piece was half filled before the changes. Pricing ended up at LIBOR plus 4% on the $600 million "B" piece and LIBOR plus 31/4% on the $100 million revolver and "A" piece for the same amount. There was a 50 basis point commitment fee for pro rata retail commitments above $10 million, while a 12.5 basis point upfront fee was being offered on the "B" loan (LMW, 2/17).
The new credit will back Penn National's $780 million acquisition of Hollywood Casino Corp. A banker dismissed Penn National's vulnerability to the travel sector and the present world events affecting tourism. He said that Penn National relies on local markets and more residential customers because the company facilities are not located in such popular tourist destinations as Las Vegas, for example. "These guys are insulated from the travel sector," he said. A Bear Stearns official declined to comment, while a Merrill banker did not return calls. William Clifford, Penn National's cfo, did not return calls.