Gateway Casinos to include bond deal as part of financing effort

By Paul Deckelman

New York Oct. 15 - Gateway Casinos & Entertainment is expected to sell $250 million of seven-year second-lien notes as part of the company's refinancing, market sources said Friday.

However, such an offering is seen as far from imminent.

The Burnaby, B.C.-based casino and entertainment company is also arranging $285 million of bank financing, which is expected to launch at mid-week, a source said. The bank deal will consist of a $35 million revolving credit agreement and a $250 million five-year first-lien term loan

Jefferies & Co, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on that deal.

A high yield primary market source meanwhile said that while there are "whispers" in the junk market about a bond deal to go along with the bank financing, "it's not really out there yet," indicating that nothing formal or concrete has really been decided yet.

He said that there was timeline for the bank deal, but not the bond issue, and agreed that the bank financing would get done first and then the bond deal would take shape.

Market sources believe that the same banks doing the bank loan will probably be on the bonds.

-Sara Rosenberg contributed to this story

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