CIBC World Markets' Isle of Capri "B" tranche has been wildly oversubscribed, leading to an expected 1/4% reverse flex in pricing. The $250 million "B" for the gaming company is four times oversubscribed, enabling pricing to be cut to LIBOR plus 21/ 2%, said a banker following the deal. The $250 million, six-year revolver is still in the market with commitments due by April 18, but this is well on its way, he said. The credit was attractive for a number of reasons, including the resilience of the gaming sector as well as good operating performance (LMW, 3/31).
The refinancing also improved the credit profile of the bank debt, said the banker. The addition of $200 million in subordinated notes replacing bank debt kept total leverage at 4.5 times, but the senior leverage was reduced from well north of 2 to 1.9 times. Rex Yeisley, senior v.p. and cfo of Isle of Capri, said the performance of the non-Vegas casinos have held up throughout the last year.