Maverick Gaming firms $300 million term loan B at Libor plus 750 bps

By Sara Rosenberg

New York, Aug. 18 – Maverick Gaming LLC finalized pricing on its $300 million covenant-lite term loan B (B3/B-) at Libor plus 750 basis points, the high end of the Libor plus 725 bps to 750 bps talk, according to a market source.

Additionally, the 50 bps pricing step-down on the term loan was changed to when first-lien net leverage is less than 3.75x from when first-lien net leverage is less than 4x, and the call protection was revised to non-callable for one year, then hard call protection of 102 for one year and 101 for six months from non-callable for one year, then a 101 hard call for one year, the source said.

Also, the maturity was shortened to five years from seven years, the fixed incremental amount was modified to the greater of $45 million and 75% of EBITDA from the greater of $45 million and 100% of EBITDA, and incremental ratio debt was changed to unlimited pari passu indebtedness subject to 4.5x first-lien net leverage from unlimited pari passu indebtedness subject to closing first-lien net leverage.

Furthermore, MFN was changed to apply to all pari passu first-lien debt instead of being limited to pari passu incremental term loan debt, and a limitation was placed on any payment in consideration for an MFN amendment unless all lenders are offered to participate in such amendment and consideration is offered to be paid or is paid to all lenders that consent, the source continued.

Consolidated EBITDA was revised to cap pro forma cost saves add-back at 15% of EBITDA with a 5% sub-limit for non-acquisition related cost saves from just being capped at 25% of EBITDA, and the excess cash flow sweep was modified to 75% with step-downs to 50%, 25% and 0% at 4.0x, 3.25x and 2.50x first-lien net leverage from 75% sweep with step-downs to 50%, 25% and 0% at 0.5x, 1.0x and 1.5x inside closing first-lien net leverage.

Sale leasebacks were changed from not applicable to a $50 million aggregate cap on sale leaseback transactions, no reinvestment rights from proceeds of sale leaseback transactions until first-lien net leverage of below 3.75x is achieved, and a carveout for the first $8 million of net proceeds from Lakewood sale leaseback which can be invested in Washington card room growth capital expenditure.

General debt basket was updated to the greater of $15 million and 33.3% of EBITDA from the greater of $22.5 million and 50% of EBITDA, and the purchase money & capital lease obligations basket was changed to the greater of $10 million and 22.5% of EBITDA from the greater of $13.5 million and 30% of EBITDA.

The general liens basket is not the greater of $15 million and 33.3% of EBITDA instead of the greater of $22.5 million and 50% of EBITDA, the general investment basket was revised to the greater of $10 million and 22.5% of EBITDA from the greater of $20 million and 45% of EBITDA, investments in non-loan parties was changed to the greater of $5 million and 11% of EBITDA from the greater of $10 million and 22.5% of EBITDA, and the non-guarantor cap on permitted acquisitions was modified to the greater of $10 million and 22.5% of EBITDA from the greater of $15 million and 33.3% of EBITDA.

Investments in unrestricted subsidiaries was changed to the greater of $2.5 million and 5.5% of EBITDA from the greater of $4.5 million and 10% of EBITDA, the investment ratio was revised to unlimited subject to 4.0x total net leverage ratio from unlimited subject to 0.75x inside closing total net leverage ratio, and the initial restricted payment base amount was changed to the greater of $7.5 million and 16.67% of EBITDA from the greater of $10 million and 22.5% of EBITDA.

Available amount governor for restricted payments and RDP was revised to 4.75x total net leverage from closing total net leverage, the restricted payment ratio was changed to unlimited subject to 3.25x total net leverage from unlimited subject to 1.5x inside closing total net leverage, the restricted debt prepayments ratio was revised to unlimited subject to 3.75x total net leverage from unlimited subject to 1.0x inside closing total net leverage, and the company must now include regional and segment-level reporting for revenue and EBITDA.

The term loan still has a 1% Libor floor and an original issue discount of 98.

Lastly, the company upsized its revolving credit facility to $55 million from $50 million and changed the incremental priority obligation cap to $20 million from $25 million.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and Jefferies LLC are the bookrunners on the deal, with Deutsche the administrative agent.

Recommitments were scheduled to be due at 5 p.m. ET on Wednesday, the source added.

Allocations are expected on Thursday.

Proceeds will be used to refinance the company’s existing capital structure.

Maverick Gaming is a Kirkland, Wash.-based owner and operator of regional casinos and cardrooms.

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