Gaylord Entertainment anticipates launching $225 million facility in near future

By Sara Rosenberg

New York, Feb. 10 - Gaylord Entertainment Co. expects to hit the primary bank loan market with a new $225 million credit facility sometime in the near future, according to a source close to the deal. A specific date for the bank meeting has not yet been established, however, the loan is targeted to close in about six weeks so the launch is expected to be relatively imminent.

Deutsche Bank, Bank of America and CIBC are the lead banks on the deal.

The facility will likely consist of $200 million in term loans and a $25 million revolver, all maturing in three years, the source told Prospect News. Interest rates have not been made public as of yet.

"[The company is] remaining somewhat flexible to see where the appetite in the market is," the source said.

The loan will be secured but specifics of the collateral package have not been publicly revealed.

Proceeds will be used to first repay the company's existing $60 million term loan, second to complete the construction of Gaylord Opryland Texas Resort & Convention Center and third, if there are excess funds remaining, for general corporate purposes, the source said.

The Gaylord Opryland Texas project is still within budget and on schedule to open in April 2004, according to a news release. As of year-end 2002, the company had spent approximately $193.1 million on the project, and the recently committed credit facility ensures funding for the remaining $259.8 million to be spent through completion.

Since the funding will be used for a development project the company has opted to use bank debt rather than high-yield bonds due to the fact that "it's probably best to issue high yield from a pricing standpoint once [the company] has a little bit more track record involved with the assets that are collateralizing this loan," the source said.

"We are now in a much stronger financial position than at the beginning of the year," said David Kloeppel, chief financial officer, in the release. "The financing we arranged will provide liquidity on attractive terms to complete our Texas project and advance our growth plans.

"Our asset disposition program, which contributed more than $275 million in capital to the company during 2002 and streamlined our operations, will also continue to be a source of liquidity," Kloeppel added.

Gaylord Entertainment is a Nashville, Tenn. diversified entertainment and communications company operating.

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