Gateway Casinos talks $255 million seven-year notes to yield 8¼%-8½%; pricing Wednesday

By Paul A. Harris

Portland, Ore., Feb. 14 – Gateway Casinos & Entertainment Ltd. talked its $255 million offering of seven-year second priority senior secured notes (Caa1/CCC+) to yield 8¼% to 8½%, according to market sources.

Talk comes tight to initial guidance in the mid 8% area, according to a trader.

Books were scheduled to close at 5 p.m. ET on Tuesday, and the Rule 144A and Regulation S for life deal is set to price Wednesday morning.

Morgan Stanley & Co., SunTrust Robinson Humphrey, BMO Capital Markets, Macquarie Capital, CIBC World Markets and National Bank of Canada Financial Markets are the joint bookrunners. ING is the co-manager.

The notes come with three years of call protection.

The Burnaby, B.C.-based owner of gaming properties plans to use the proceeds to refinance debt, as well as to fund the acquisition of two “Gaming Bundles” from the Ontario Lottery and Gaming Corp., to fund a dividend to shareholders and for general corporate purposes, including capital expenditures.

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