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Completion of Oversubscribed C$560 Million Financing Announced by Gateway(December 10, 2013)
BURNABY, BRITISH COLUMBIA -- (Marketwired) -- 12/10/13 -- Gateway Casinos & Entertainment Limited ("Gateway" or the "Company") is pleased to announce the completion of a successful C$560 million financing. The Company raised C$310 million in first lien term loans from a syndicate of banks, and secured an additional C$50 million revolver which was undrawn at closing. In addition, the Company issued C$200 million in aggregate principal amount of 8.50% notes due 2020 (the syndicated bank loans and the note offering, the "Financing").
The transaction was oversubscribed, allowing Gateway to ultimately increase the size of the term loan A and decrease the size of the term loan B and notes. As a result of the higher allocation of term loan A as well as lower interest rates across the capital structure, Gateway was able to refinance its debt at a substantially lower overall cost of capital. Furthermore, the Company was also able to improve its covenants and extend its debt maturities. The Financing helps the Company to execute on its plans to improve the customer experience by further investing in its properties, enhancing product offerings, and exploring new growth opportunities. Gateway's industry leading EBITDA margins and strong cash flow generation will further help the Company execute its strategy, possibly accelerating EBITDA growth while assisting the future deleveraging of its balance sheet.
TD Securities Inc. acted as sole lead arranger and sole book-runner for the syndicated bank loans, with The Toronto-Dominion Bank as administrative agent, BMO Capital Markets, ING, and SunTrust Robinson Humphrey as syndication agents, and Morgan Stanley, and Macquarie Capital Markets Canada as documentation agents.
TD Securities Inc., BMO Capital Markets, Morgan Stanley and SunTrust Robinson Humphrey were the joint bookrunners for the note offering. Other underwriters include ING and Macquarie Capital Markets Canada.
Gateway is one of the largest casino operators in Canada. The Company has twelve gaming properties in British Columbia and Alberta including nine casinos, two community gaming centres and a bingo hall. Gateway properties total 386,200 square feet and have a total of 5,567 slot machines, 189 table games, and 49 poker tables.
Cautionary Statement Regarding Forward Looking Information and Statements
The notes were offered and solid in Canada on a private placement basis and in the United States only to qualified institutional buyers under Rule 144A. of the United States Securities Act of 1933, as amended. This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Certain statements contained in this press release contain "forward-looking information" pursuant to U.S. and Canadian securities laws ("forward-looking statements"). Forward-looking statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential" and "capable" and similar expressions are intended to identify forward-looking statements. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. Important factors potentially affecting performance include but are not limited to the possibility the highly competitive nature of the gaming industry; economic and competitive conditions in the regions we operate in; changes to the regulatory regime governing our business; our ability to renew the contracts governing our gaming operations; our ability to obtain new casino licenses; wage and/or benefit increases resulting from new collective bargaining agreements, or our inability to reach an agreement with unions; our ability to renew lease agreements for our properties; potential undiscovered liabilities and capital expenditures associated with acquisitions; the impact of liquor laws and associated liquor licenses in British Columbia and Alberta; current global economic conditions; damage or service interruptions to our technology services and electrical power; volatility in our hold percentage (the ratio of net win to total amount wagered); the existence of a fair value impairment in a business segment; our ability to grow through the acquisition, location, relocation and development of new gaming operations; operating risks common to the hotel business; changes to our customer base; players in our casinos committing fraud or cheating; new municipal restrictions or prohibitions; our potential liability arising from litigation related to our business; our ability to obtain adequate insurance to cover all risks incident to our business; our ability to support expanding operations with existing systems; a loss of management and other key personnel; and The Catalyst Capital Group Inc., on behalf of Funds managed by it's control of the Company. Any forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release except as required by applicable securities laws.
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