Station Casinos did not want to worry about market pricing when its bank facility matures in September 2003, so it decided to refinance early, according to Glenn Christenson, executive v.p. and director. The Las Vegas gaming company was able to secure a new five-year, $365 million revolver with tiered pricing ranging from LIBOR plus 13Ž 4% to LIBOR plus 21Ž 2%, based on debt-to-EBITDA multiples, Christenson noted. The line also has a commitment fee of 75 basis points.
The new credit is about $65 million larger than the previous $234.8 million line because Station Casinos felt that it needed a bigger source of funds, Christenson said. The company has been growing since its inception in 1976 and acquired three properties in Las Vegas last year, he noted. "I wouldn't rule [future acquisitions] out," he added. Indeed, Station Casinos announced this past July that it has reserved 73 acres of land in the Summerlin community of Las Vegas, which it will acquire by next year at a cost of $65 million. Christenson did not mention that the increase would be used to fund the Summerlin acquisition, but he did note that the new line would be tapped to retire $150 million in senior subordinated notes.
Bank of America arranged the new credit in conjunction with agent banks Bank of Scotland, Deutsche Bank, Dresdner Bank, Lehman Brothers and Wells Fargo Bank. Christenson noted that most of the banks were previously involved with Station Casinos, so syndication of the new line settled fairly quickly. He also cited the company's longstanding relationship with B of A. "They do a terrific job," he added.