Banc of America Securities and Citibank are in the market with a $1.25 billion best-efforts refinancing credit for Las Vegas-based hotel and casino operator Mandalay Resort Group. Les Martin, v.p. and chief accounting officer, said the company liked the current market climate and decided to refinance. "The old line, led by B of A, matures a year from now and Mandalay does not want to go to the wire," he said.
Citibank is the co-lead and co-arranger, after expressing interest in stepping into the industry, said Martin. B of A was the lead on the existing loan. "New banks looking to get involved in the sector are encouraged," he noted. "Due to mergers and Japanese bank retrenchment, it is a different universe out there than four years ago, when the old credit was launched." The loan is being downsized as the current $1.8 billion line has only $720 million outstanding, and Mandalay did not want such a massive line, Martin added.
The proposed credit is split into a $900 million revolver and $350 million "A" term loan. Pricing on the pro rata is LIBOR plus 13/4% and the deal is expected to wrap up by the end of July. The company has a BB+ and Ba2 rating from the agencies and gaming is considered fairly recession proof, Martin stated.