Station Casinos taps credit line

Station Casinos is tapping the remainder of its credit line in a move bond analysts say could indicate a restructuring that could soon include a bankruptcy filing.

The locals gaming company requested the $257 million remaining in the credit line on Friday, with $239 million of the request funded that day, according to a filing Monday with the Securities and Exchange Commission.

Barbara Cappaert, a bond analyst with KDP Investment Advisors, said the money was taken out in anticipation of Station Casinos’ access to the money being cut if it defaults on its bank covenants before the end of the month, which is expected.

“The move was not surprising given the potential covenant violations Station faces,” Cappaert wrote in an investors’ note. “We see this as a first move in what could likely be a series of moves toward a restructuring of the company’s onerous debt load.”

Station Casinos declined to comment Tuesday beyond the filing. The company had 14,500 workers in January, the last time it made that information available. There have been several cutbacks in employee ranks since then.

The company said in its third-quarter earnings report filed in November, however, that if it was “unable to amend our financial covenants,” it is likely that we will not be in compliance with its debt-to-cash flow covenants beginning on Dec 31.

“Any failure to comply with such covenants would result in an event of default under our Credit Agreement that would entitle the lenders thereunder to exercise their remedies and preclude us from making additional borrowings under the Credit Agreement,” the Nov. 11 filing read.

Station Casinos entered into a new $900 million credit agreement, which included a $650 million revolving credit line, when the company was bought in November 2007.

Station Casinos had $5.4 billion in long-term debt for the third quarter ended Sept. 30. It had paid $281.9 million in interest during through September.

Chris Snow, a debt analyst with CreditSights, said in a note to investors Tuesday that the drawdown provides one of two services — it puts cash on the company’s balance sheet, providing money to navigate a restructuring, or it potentially gives Station Casinos negotiating power with banks since the lenders have more cash at risk.

“(Station Casinos) liquidity options were limited without any concession by the bank lenders as it approached the year-end,” Snow wrote.

The drawdown came the same week the company abandoned a private exchange offer that received little interest from the company’s bond holders.

The company found few takers willing to swap up to $459 million for unsecured notes worth a combined $2.088 billion, some trading as low as 8 cents on the dollar at the time.

The new debt would have been issued as two 10 percent secured term loans due in 2016.

Snow said in note to investors that Station Casinos will “need to obtain a waiver on its bank lenders” or receive an infusion of cash from its owners to avoid a default.

An infusion of $450 million to $500 million by the owners was contemplated as part of the failed debt exchange, but no additional details have been given since November.

The filing announcing the debt exchange did not specify which of the owners — the Fertitta family or Los Angeles-based real estate firm Colony Capital — would provide the cash infusion, saying that “entities affiliated with existing equity owners … or institutions or persons who are investors” will provide the loan.

Colony Capital owns 75.9 percent of the company. Members of the founding family, the Fertittas, own 24.1 percent.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like