Debt holders unhappy with Station Casinos’ debt exchange offer

A Wednesday morning filing by Station Casinos with the Securities and Exchange Commission indicates the gaming company is running into some resistance for its recently announced debt exchange.

The filing said an ad hoc committee, which holds nearly $1.5 billion, or 66 percent of all old outstanding notes, views the offer as “deficient” and does not intend to participate.

KDP Investment Advisors bond analyst Barbara Cappaert pointed out in a note to investors that the 66 percent is "a key figure in that it is the amount needed in bankruptcy to approve a reorganization plan."

Station Casinos announced on Nov. 25 it hoped for a private exchange of $459 million for $2.088 billion in debt notes trading as low as 8 cents on the dollar.

The filing states that the locals gaming company received a letter from a law firm, which was not identified, stating that the law firm and another law firm, also not identified, represent an “ad hoc committee of approximately 20 holders” of some of the outstanding debt Station Casinos hopes to exchange.

Instead, the group would like to talk with the casino company about the committee’s “concerns,” something Station Casinos said it would do.

The exchange offer, however, continues “pending such discussions.”


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