Gateway Casinos talks C$200 million seven-year notes at 8½% area yield; pricing expected Thursday

By Paul A. Harris

Portland, Ore., Nov. 20 - Gateway Casinos & Entertainment Ltd. talked a C$200 million offering of seven-year second-priority senior secured notes to yield in the 8½% area, a market source said on Wednesday.

The deal is expected to price on Thursday.

The deal size was announced at up to C$220 million; the C$200 million lower amount reflects an upsizing of the concurrent term loan A.

TD Securities, BMO Securities, Morgan Stanley & Co. and SunTrust Robinson Humphrey are the active joint bookrunners.

The deal is in the market via Rule 144A in the United States.

The notes become callable in three years at par plus 50% of the coupon.

Proceeds will be used to refinance the company's existing senior secured credit facility, to fund the tender for C$170 million of its 8 7/8% second-priority senior secured notes due 2017 and to fund a distribution to shareholders.

The prospective issuer is a Burnaby, B.C.-based owner of gaming properties.

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