American Entertainment Properties withdraws high-yield bond offering

By Paul A. Harris

St. Louis, Oct. 18 - American Entertainment Properties Corp. has withdrawn an offering of high-yield bonds that was launched in mid-September, according to a market source, who added that no reason was given for the deal being pulled.

The company, which is the parent of Las Vegas-based American Casino & Entertainment Properties, launched a $250 million offering of eight-year senior floating-rate notes (Caa1/B-) on Sept. 20.

Subsequently, according to market sources, the deal was downsized to $200 million. Also structural modifications and covenant changes were under consideration.

Bear Stearns & Co. had been the bookrunner.

Proceeds, together with cash and cash equivalents, were earmarked to pay a dividend to a newly formed corporation that will become the company's parent.

American Entertainment Properties' ultimate parent is American Real Estate Partners, LP (AREP), a Delaware master limited partnership the units of which are traded on the New York Stock Exchange.

As of Dec. 31, 2005, affiliates of Carl Icahn owned about 86.5% of the outstanding preferred units and about 90% of the outstanding depositary units of AREP.

Icahn is the chairman of the board of directors of American Property Investors, Inc., AREP's general partner.

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