Argosy Gaming Company amended and closed a $400 million credit facility this month to fund the buyout of total shares of Argosy Casino and Hotel. This replaces a $200 million facility that provided options to draw an additional $225 million. "Now we can draw on $400 million without contingencies, versus our old facility in which we could draw additional money only if we were acquiring 42% of all minority shares," said G. Dan Marshall, v.p. and treasurer of Argosy Gaming. He explained that the limited partners had an exit strategy that allowed them to sell of their shares to the main shareholder, Argosy Gaming. It paid the purchase price of $105 million for the minority interest from Centaur, Inc. Argosy Gaming used its original facility to fund the buyout of Conseco's $260 million in shares. Conseco sold them off in part to fund a $2 billion reduction in bank and public debt. Argosy Gaming, based in Alton, Ill., is a river boat casino operator on the Ohio, Mississippi, and Missouri rivers.
The original facility was signed in June of 1999 and allowed borrowing up to $425 million. Marshall explained that the facility was amended because the limited partners sold their shares. "By this June we would've had only three years left [on the original facility]," he said, adding that market conditions also encouraged refinancing now. "The high-yield market is good, so we issued more high-yield debt. The market timing is right to restructure capital. Sometimes the market works with you."
Wells Fargo leads the deal, and lead the original facility. There are 13 banks in the syndicate. The facility is not yet rated. Marshall says there are no new covenants to the amended facility. "There are only minor revisions," he explained. The company has no other lines of credit.