Greektown granted final approval for additional $46 million of DIP financing

By Jennifer Lanning Drey

Portland, Ore., Feb. 25 - Greektown Holdings, LLC obtained final court approval to increase its $150 million of existing debtor-in-possession financing to $196 million in the U.S. Bankruptcy Court for the Eastern District of Michigan, according to an attorney.

Merrill Lynch Capital Corp. is the administrative agent for the amended facility. Merrill Lynch Capital Corp. and Wells Fargo Foothill, Inc. are the co-managers, and Merrill Lynch, Pierce, Fenner and Smith Inc. is the lead arranger.

The additional DIP loans include a $26 million new tranche A delayed-draw term loan and a $20 million tranche B-1 delayed-draw term loan, both to be used to cover construction costs.

The DIP facility will mature on the earliest of June 1, subject to extension to Sept. 1, 2009, the effective date of a plan of reorganization and upon the sale or transfer of any substantial portion of the company's hotel or casino.

Interest on the existing portion of the loan will increase to Libor plus 825 basis points, plus 5% paid-in-kind interest, and interest on the new portion of the loan will be Libor plus 625 bps.

Greektown previously said it needed the additional financing to complete the construction of the expanded Greektown Casino entertainment complex because initial cost projections, which were supposed to be covered by the existing DIP facility, were affected by the unexpected downturn in the economy.

The company said the general contractor issued stop orders on the construction on Jan. 16, pending assurance that Greektown has enough funding to complete the project.

Greektown, a Detroit casino operator, filed for bankruptcy on May 29, 2008. Its Chapter 11 case number is 08-53104.

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