Penn National Gaming Refinances Development and Construction Funding Advances for Hollywood Casino Jamul – San Diego
October 20 2016 - 4:15PM
Business Wire
Penn National to Apply Approximately $274
Million to Debt Reduction
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or
the “Company”) announced today that an affiliate of the Jamul
Indian Village of California (“JIV” or the “Tribe”) has completed
an approximately $460 million refinancing related to the recently
opened Hollywood Casino Jamul – San Diego (the “Casino”). Since
2012, Penn National has provided approximately $331 million in
financing to the project to develop and construct the Casino and to
purchase certain Tribal debt. JIV intends to use the net proceeds
from the refinancing to repay development costs (including those
advanced by Penn National), to retire tribal debt and for working
capital. Penn National has been repaid approximately $274 million
of the capital that it advanced for the development and
construction of the property, the acquisition of Tribal debt and
accrued interest. The Company intends to primarily use these funds
to reduce borrowings under its credit facilities. Penn National is
continuing to provide a portion of the project’s financing,
including a Term Loan C facility of up to $108 million and a Term
Loan C delayed draw commitment of up to $15 million. These loans
are due in 2022 and are priced at LIBOR plus 8.50% with a 1% LIBOR
floor. Penn National has also agreed to fund up to $5 million of
subordinated debt to cover incremental project costs at a higher
interest rate.
Timothy J. Wilmott, President and Chief Executive Officer of
Penn National, commented, “We are proud to have funded the
construction and opening of Hollywood Casino Jamul – San Diego, and
to support the JIV in securing a post-opening financing facility
that, combined with the Casino operations, will help the Tribe
realize its goal of becoming economically self-sufficient. The
financing package we are announcing today reflects Penn National’s
continued focus on actively and conservatively managing our capital
structure to provide the financial flexibility to support our near-
and long-term growth initiatives.
“We intend to use the approximately $274 million of proceeds we
are receiving to reduce borrowings under our credit facilities and
further strengthen our liquidity position. Pro forma for the recent
debt repayments, our total gross leverage ratio at September 30
declined to approximately 5.76x. Furthermore, with the addition of
fees resulting from the Jamul management and licensing agreements
to our existing operating base and our other recently announced
accretive transactions, Penn National has further diversified our
free cash flow mix, allowing us to continue to reduce leverage and
maintain high levels of liquidity.”
In addition to providing the revolving credit facility, Citizens
Bank, Fifth Third Bank and Goldman Sachs acted as joint lead
arrangers.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in gaming and racing facilities and video gaming terminal
operations with a focus on slot machine entertainment. At June 30,
2016, the Company operated twenty-six facilities in sixteen
jurisdictions, including Florida, Illinois, Indiana, Kansas, Maine,
Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New
Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. At
June 30, 2016, in aggregate, Penn National Gaming operated
approximately 33,400 gaming machines, 800 table games and 4,600
hotel rooms.
Forward-looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by the use of forward
looking terminology such as “expects,” “believes,” “estimates,”
“projects,” “intends,” “plans,” “seeks,” “may,” “will,” “should” or
“anticipates” or the negative or other variations of these or
similar words, or by discussions of future events, strategies or
risks and uncertainties, including future plans, strategies,
performance, developments, acquisitions, capital expenditures, and
operating results. Actual results may vary materially from
expectations. Although the Company believes that our expectations
are based on reasonable assumptions within the bounds of our
knowledge of our business, there can be no assurance that actual
results will not differ materially from our expectations.
Meaningful factors that could cause actual results to differ from
expectations include, but are not limited to, risks related to the
repayment or subordination of the loans described herein, sovereign
immunity, local opposition (including several pending lawsuits),
access, regional competition and property performance and other
factors as discussed in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2015, subsequent Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, each as filed with
the United States Securities and Exchange Commission. The Company
does not intend to update publicly any forward-looking statements
except as required by law. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this press
release may not occur.
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version on businesswire.com: http://www.businesswire.com/news/home/20161020006513/en/
Penn National Gaming, Inc.Saul V. ReibsteinChief Financial
Officer610-373-2400orJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
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