Pinnacle Entertainment – who owns and operates six casinos, located in Louisiana, Missouri and Indiana, and a racetrack in Ohio – has announced today that it has closed the previously announced public offering of $325 million. The offering was in aggregate principal amount of 7.75% senior subordinated notes, due 2022.
Not only that, the Company also stated today that it has closed a $325 million incremental term loan under its current credit facility. The term loan was issued at a price of 99.0% with an interest rate of 300 basis points over LIBOR and a 1.0% LIBOR floor. The term loan will mature in March 2019, if all goes to plan.
The Company has said it will also use all of the net proceeds of the notes offering and a portion of the net proceeds from the term loan to redeem all $385 million in aggregate principal amount of its existing 7.5% senior subordinated notes due 2015 and to repay all $70.0 million in outstanding revolving credit borrowings under its credit facility. The Company will use the remaining net proceeds of the term loan to continue development of the projects in its growth pipeline and for general corporate purposes.
Executive vice president and chief financial officer of Pinnacle Entertainment, Carlos Ruisanchez, said: “The issuance of the new notes, incurrence of the term loan, redemption of the 7.5% notes and repayment of revolver balances extends our maturity schedule, lowers the overall effective interest rate on our debt capital structure, and bolsters our liquidity position.
“We intend to use the excess proceeds of these financing transactions, along with the cash flow provided by our existing operations, for construction of L’Auberge Baton Rouge, the River City casino expansion, a potential casino development at River Downs and for general corporate purposes. Upon completion, these long-term operating assets will now be financed with a long-term capital structure.”