Golden Nugget Plans $5.55 Billion in Bond Sales
Golden Nugget, the land-based casino business organization controlled by billionaire man of affairs Tilman Fertitta, could sell $5.55 billion worth of collective bonds to refinance previously issued debt at more favorable terms.
The gaming operator will reportedly sell $1.85 1000000000 worth of seven-year leveraged loans and secured and unsecured issues of the same size, Bloomberg reports, citing unidentified sources intimate with the matter.
Along with a new revolving credit entry facility, proceeds from the offerings testament live used to refinance existing debt,” according to the word agency.
It’s believed Jefferies, a long-standing loaner to Fertitta’s businesses. is running the debt sales for Fertitta’s company. type A conference is scheduled for later today with possible investors.
Good Time for Golden Nugget to Refi Debt
With interest group rates stock-still around historic lows, it’s an nonpareil clip for any corporate issuer to pat the bond certificate market. That’s especially true up if that loyal is sounding to refinance older debt, as appears to follow the grammatical case with Golden Nugget.
In the eyes of many bond paper market experts, it’s nearly a foregone closing that the Fed Reserve will rise stake rates this year to nerveless soaring inflation. Consensus calls for 3 place hikes. But some market place observers say that figure could follow higher if the Consumer Price Index (CPI) continues running hot.
Given the expanse of Fertitta’s business organisation empire, which includes the Landry’s eatery conglomerate, he’s undoubtedly inwards spot with inflationary pressures. Additionally, range hikes by the Union soldier Reserve mingy corporate issuers have got to sell debt with higher coupons to enticement investors out from Treasuries, which are almost risk-free.
It’s non now percipient what Golden Nugget bonds testament live refinanced with the aforementioned sales. But the gaming society has $1.345 one million million worth of bonds with a coupon of 6.75 percent coming due in 2024. Additionally, Golden Nugget sold $250 million worth of leveraged loans at a whopping 15 percent in April 2020 – the darkest days of the coronavirus shutdown.
Though it caught plenteousness of marketplace participants past surprisal at the time, that sale is widely credited with thawing what were and then frigid temperatures inwards US corporate debt markets.
Bond Sales Follow Failed SPAC Deal
News of Golden Nugget’s debt issuance arrives to a lesser extent than a month after Fertitta Entertainment (FEI) and special aim acquisition fellowship (SPAC) FAST Acquisition (NYSE:FST) agreed to finish merger talks. That dealings would get brought Fertitta’s companionship rearward to in public traded position after Fertitta took the business common soldier in a 2010 leveraged buyout.
FEI paid the blank-check keep company upwardly to $33 zillion to overcompensate termination-related expenses. That figure includes deferred payments and is contingent upon(p) upon whether or not the SPAC finds another merger partner.
Golden Nugget operates quintet US casinos — 2 inward Nevada and single apiece in Louisiana, Mississippi, and New Jersey.
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