Eldorado Resorts, Inc. (NASDAQ:ERI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
|
Entry Into a Material Definitive Agreement |
Amendment to Credit Agreement
On March28, 2017, Eldorado Resorts, Inc., a Nevada corporation
(the Company) entered into Amendment No.1 (the Amendment) to that
certain Credit Agreement, dated as of July23, 2015, by and among
the Company, the guarantors party thereto, the lenders party
thereto and JPMorgan Chase Bank, N.A., as administrative agent
(the Credit Agreement).
The material terms of the Amendment are as follows:
| 1. |
the provisions related to unrestricted subsidiaries were amended to permit Eagle I Acquisition Corp., a Delaware corporation, and Eagle II Acquisition Company LLC, a Delaware limited liability company (Eagle II), to be designated as unrestricted subsidiaries for the purpose of consummating the Companys pending acquisition (the Acquisition) of Isle of Capri Casinos, Inc. (Isle) and the financing transactions related thereto (the Financing); |
| 2. |
the definitions of Consolidated Funded Indebtedness and Consolidated Interest Expense were amended to permit Eagle II to hold and deposit the proceeds of the Financing in advance of the consummation of the Acquisition; and |
| 3. |
the permitted investments provisions was amended to permit the Company to make investments into Eagle II to cover interest, fees and insufficiencies related to the escrow deposit agreements to be entered into in connection with the Financing. |
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the Amendment, a copy
of which is filed as Exhibit 10.1 hereto and is incorporated
herein by reference.
Eagle II Notes Indenture
On March29, 2017, Eagle II, a wholly-owned subsidiary of the
Company, issued $375 million aggregate principal amount of 6%
Senior Notes due 2025 (the Notes) to an indenture, dated as of
March29, 2017 (the Indenture), between EagleII and U.S. Bank,
National Association, as Trustee. Interest on the Notes will be
paid every six months in arrears on April1 and October1,
commencing October1, 2017.
The proceeds of the offering initially will be placed in escrow
pending satisfaction of certain conditions, including
consummation of the Acquisition. Upon satisfaction of such
conditions, the Company will assume (the Assumption) EagleIIs
obligations under the Notes and the Indenture, and certain of the
Companys subsidiaries (including Isle and certain of its
subsidiaries) (the Guarantors) will guarantee the Companys
obligations under the Notes. As used herein, references to the
Issuer refer (i)prior to the consummation of the Assumption, to
the Eagle II and (ii)following the consummation of the
Assumption, to the Company.
The Notes will be subject to a special mandatory redemption in
the event (x)the escrowed funds have not been released in
connection with the consummation of the Isle Acquisition on or
prior to June19, 2017 or, if the termination date under the
merger agreement governing the Isle Acquisition has been
extended, September18, 2017, (y)Eagle II notifies the escrow
agent that the Company and Isle will not pursue the consummation
of the Isle Acquisition or (z)Eagle II fails to deposit amounts
due into escrow. The special mandatory redemption price will be
equal to 50% of the aggregate principal amount of the Notes, plus
accrued and unpaid interest to, but excluding, the date of such
special mandatory redemption.
Upon satisfaction of the escrow conditions, the Issuer intends to
apply the net proceeds of the sale of the Notes, together with
borrowings under a proposed new $1.45 billion term loan,
borrowings under a proposed new $300 million revolving credit
facility and cash on hand, to (i)pay the cash portion of the
consideration payable in the Isle Acquisition, (ii)refinance all
of the debt outstanding under Isles existing credit facility,
(iii)redeem or otherwise repurchase all of Isles outstanding
5.875% Senior Notes due 2021 and 8.875% Senior Subordinated Notes
due 2020, (iv)repay all amounts outstanding under the Issuers
existing credit facility and (v)pay fees and costs associated
with the Isle Acquisition and such financing transactions.
The Notes and the guarantees are Issuers and, upon the Assumption
will be the Guarantors, senior obligations. The Notes and the
guarantees will rank equally in right of payment with all of
Issuers and the Guarantors existing and future senior debt and
senior in right of payment to all of the Issuers and the
Guarantors future subordinated debt. The Notes and the related
guarantees will rank senior in right of payment to all of the
Issuers and the Guarantors existing and future debt that is
expressly subordinated in right of payment to the Notes and
equally in right of payment with all of the Issuers and the
Guarantors existing and future senior liabilities. The Notes and
the related guarantees will be effectively subordinated to all of
the Issuers and the Guarantors existing and future secured debt,
including indebtedness under the New Credit Facility and other
secured debt permitted to be incurred to the terms of the
indenture governing the Notes, to the extent of the value of the
collateral securing the New Credit Facility and such other
permitted debt. The Notes and the related guarantees will be
structurally subordinated to all of the liabilities of our
subsidiaries and other entities in which we have an equity
interest that do not guarantee the Notes.
On or after April1, 2020, the Issuer may redeem all or a portion
of the Notes upon not less than 30 nor more than 60days notice,
at the redemption prices (expressed as percentages of the
principal amount) set forth below plus accrued and unpaid
interest and additional interest, if any, on the Notes redeemed,
to the applicable redemption date, if redeemed during the
12-month period beginning on April1 of the years indicated below:
|
Year |
Percentage | |||
| 104.500 | % | |||
| 103.000 | % | |||
| 101.500 | % | |||
|
2023 and thereafter |
100.000 | % | ||
If the Issuer experiences certain change of control events (as
defined in the Indenture), it must offer to repurchase the Notes
at 101% of their principal amount, plus accrued and unpaid
interest to the applicable repurchase date.
If the Issuer sells assets under certain circumstances and does
not use the proceeds for specified purposes, the Issuer must
offer to repurchase the Notes at 50% of their principal amount,
plus accrued and unpaid interest to the applicable repurchase
date.
The Notes are subject to redemption imposed by gaming laws and
regulations of applicable gaming regulatory authorities.
The Indenture contains certain covenants limiting, among other
things, the Issuers ability to:
| incur additional indebtedness; |
| create, incur or suffer to exist certain liens; |
|
pay dividends or make distributions on capital stock or repurchase capital stock; |
| make certain investments; |
|
place restrictions on the ability of subsidiaries to pay dividends or make other distributions to the Issuer; |
|
sell certain assets or merge with or consolidate into other companies; and |
|
enter into certain types of transactions with the stockholders and affiliates. |
These covenants are subject to a number of exceptions and
qualifications as set forth in the Indenture. The Indenture also
provides for events of default which, if any of them occurs,
would permit or require the principal of and accrued interest on
such Notes to be declared due and payable.
The foregoing description is qualified in its entirety by
reference to the full text of the Indenture, filed as Exhibit 4.1
hereto and incorporated by reference herein.
| Item2.03. |
Creation of a Direct Financial Obligation |
The information set forth under Item1.01 above is incorporated by
reference herein.
| Item9.01. | Financial Statements and Exhibits. |
(d) Exhibits:
|
ExhibitNo. |
Description |
|
| 4.1 |
Indenture dated as of March29, 2017, by and between Eagle II Acquisition Company LLC and U.S. Bank, National Association. |
|
| 10.1 |
Amendment No. 1, dated as of March 28, 2017, by and among Eldorado Resorts, Inc., a Nevada corporation, the Guarantors party thereto, certain Lenders that execute and deliver a Consent to the Amendment, and JPMorgan Chase Bank, N.A., as administrative agent. |
About Eldorado Resorts, Inc. (NASDAQ:ERI)
Eldorado Resorts, Inc. (ERI) is a gaming and hospitality company. The Company owns and operates gaming facilities located in Ohio, Louisiana, Nevada, Pennsylvania and West Virginia. The Company’s segments include Nevada, Louisiana and Eastern. The Company owns and operates various properties, such as Eldorado Resort Casino Reno, which is a 814-room hotel, casino and entertainment facility; Silver Legacy Resort Casino, which is a 1,711-room themed hotel and casino; Circus Circus Reno, which is a 1,571-room hotel-casino and entertainment complex; Eldorado Resort Casino Shreveport, which is a 403-room, all suite art deco-style hotel and tri-level riverboat dockside casino; Mountaineer Casino, Racetrack & Resort, which is a 354-room resort with a casino and live thoroughbred horse racing; Presque Isle Downs & Casino, which is a casino and live thoroughbred horse racing facility with slot machines, table games and poker located in Erie, Pennsylvania, and Eldorado Gaming Scioto Downs. Eldorado Resorts, Inc. (NASDAQ:ERI) Recent Trading Information
Eldorado Resorts, Inc. (NASDAQ:ERI) closed its last trading session down -0.12 at 18.77 with 671,614 shares trading hands.