US casino investor Bally’s Corp has secured US$1.1 billion in new term loans that are seen as critical in solving ongoing credit and liquidity concerns, including those related to existing debt and looming payment of a US$500 million license fee to secure a full commercial casino license in New York.
The term loans include a provision for lenders to potentially claim an equity stake in Bally’s New York development, its online arm Intralot and Australia’s Star Entertainment Group of which the company last week secured a 38% interest.
According to information filed by the company overnight, Bally’s has entered into an amended and restated commitment letter with Ares Management Credit funds, King Street Capital Management and TPG Credit to provide it with US$600 million of initial term loan and up to $500 million of delayed draw term loan.
The proceeds from the initial term loan, together with available cash and proceeds of the previously announced sale and leaseback of Twin River Lincoln Casino will be used for general corporate purposes, including the repayment of an existing term loan or any amounts drawn on its revolving credit facility. and the payment of fees and expenses in connection therewith. The proceeds from the delayed draw term loan will be used to pay or replenish liquidity used to pay licensing fees in connection with the company’s New York State casino license and related fees and expenses, it added.
“We appreciate the strong support of our lenders, as the A&R Commitment Letter further strengthens Bally’s liquidity position while enabling continued investment in our strategic growth pipeline – spanning online gaming, our casino portfolio and our expanding resorts developments,” said Bally’s chairman Soo Kim.
In a note, CBRE Credit Research said the term loans solve several lingering overhangs to the company’s credit story, including its maturity profile, funding needs, relationship with lenders and ability for management to now focus solely on development.
Specifically, it answers at least some questions around funding for the New York development in the Bronx, where Bally’s is planning a US$4 billion investment. This includes a US$2.3 billion integrated resort, the US$500 million license fee plus an array of community benefits and up-front investments such as parkland improvements and transportation upgrades. The IR is slated to include 3,500 slot machines, 250 tables, a 507-room hotel, event center and other amenities.
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