Bear Stearns and Merrill Lynch are launching retail syndication Penn National Gaming's $800 million acquisition credit this Thursday. Pricing on the $600 million "B" piece is LIBOR plus 3 1/2%. When launched at the managing agent level, the spread was LIBOR plus 3%, said a banker familiar with the deal. The spread on the $100 million revolver and $100 million "A" piece increased from LIBOR plus 2 3/4% to LIBOR plus 3%. The banker said the pricing increases are in sync with the expected B+/B1 ratings on the credit. The banker expected the ratings to be released later this week. Multiples are 3.1 times senior leverage and 4.7 times total leverage. Bear Stearns and Merrill bankers declined comment.
The deal will back Penn National's $780 million acquisition of Hollywood Casino Corp. The lead banks shopped the credit at the senior level last October, but postponed the retail syndication until the transaction's regulatory approval was close to done. A banker stated that approvals should wrap up next month, so the financing will line up with the acquisition's closing. Societe Generale and Credit Lyonnais already signed on at the senior agent level, while Wells Fargo and Wachovia Bank also joined in the first round (LMW, 1/13). Penn National owns or operates horse racing and casino gaming facilities in the U.S. and Canada.
William Clifford, Penn National's cfo, did not return calls for comment.