Great Canadian Gaming talks C$400 million 10-year senior notes at 6¾% area yield

By Cristal Cody

Prospect News, July 17 - Great Canadian Gaming Corp. talked its C$400 million offering of 10-year senior notes (B1/BB+/) on Tuesday to yield 6¾%, plus or minus 12.5 basis points, an informed bond source said.

Books will launch and close early on Wednesday with pricing to follow.

Great Canadian wrapped its roadshow on Tuesday in Toronto. The company started the roadshow last week in Vancouver, B.C., with stops in New York and Boston.

The deal will be offered in Canada via a private placement and in the United States by Rule 144A.

Scotia Capital Inc. and HSBC Capital (Canada) Inc. are the bookrunners. BMO Capital Markets Corp., CIBC World Markets Inc. and RBC Capital Markets Corp. are joint lead managers. National Bank Financial Inc. is the co-manager.

The issue's guarantors are current and future material restructured subsidiaries and certain other restricted subsidiaries of Great Canadian.

The notes are non-callable for five years. The issue has a 101% change-of-control put, an equity clawback for up to 35% in the first three years at par plus the coupon and a Canada call at the Canadian Bond Yield plus 100 bps.

Proceeds will be used to refinance the company's U.S. dollar-denominated $161.1 million senior secured tranche B term loans due February 2014 and $170 million senior subordinated notes due February 2015 and their related cross-currency interest rate swaps. The company will start a cash tender offer and consent solicitation for the subordinated notes.

If either the tender offer or the sale of the 10-year notes is unsuccessful, the company said it may cancel, postpone or modify its refinancing plans.

The Richmond, B.C.-based gaming, entertainment and hospitality company has operations in Canada and the United States.

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