Kerzner $575 million credit facility to launch Aug. 4

By Sara Rosenberg

New York, July 28 - Kerzner International Ltd. is scheduled to hold a bank meeting on Aug. 4 to launch its proposed $575 million senior secured credit facility, according to a syndicate document.

Credit Suisse and Deutsche Bank are joint lead arrangers on the deal.

The facility consists of a $175 million six-year revolver, a $250 million seven-year term loan B and a $150 million seven-year delayed-draw term loan, the document said.

According to a market source, pricing on all three tranches is being talked at Libor plus 275 basis points.

However, according to various company filings with the Securities and Exchange Commission, price talk is expected to be in the area of Libor plus 250 bps.

The revolver will carry a 50 bps commitment fee.

Proceeds will be used to help fund the leveraged buyout of Kerzner by its chairman, Sol Kerzner, and its chief executive officer, Butch Kerzner. The investor group also includes Istithmar PJSC, Whitehall Street Global Real Estate Limited Partnership 2005, Colony Capital LLC, Providence Equity Partners Inc. and The Related Cos. LP.

Under the purchase agreement, the group will pay $81.00 in cash per share. The aggregate transaction value is about $4 billion.

Other LBO financing will come from a new $2.88 billion CMBS financing facility and equity.

Kerzner is a Paradise Island, The Bahamas, developer and operator of destination resorts, luxury resort hotels and gaming properties.

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