Marina District gets $380 million incremental loan from Deutsche Bank

By Marisa Wong

Madison, Wis., Dec. 20 - Marina District Finance Co., Inc. entered into a lender joinder agreement with Wells Fargo Bank, NA as administrative agent and Deutsche Bank AG New York Branch as incremental term lender to increase term commitments under its amended and restated credit agreement dated July 24 by $380 million, according to an 8-K filing with the Securities and Exchange Commission.

The incremental term loan was funded on Dec. 16.

Interest will be Libor, subject to a 1% floor, plus an applicable rate based on the company's total leverage ratio. The applicable rate ranges from 450 basis points to 575 bps.

The incremental term loan has yield protection in the event that the effective yield for any term facility under the credit agreement, other than the incremental term loan, is higher than the effective yield for the incremental term loan by more than 50 bps. If that occurs, the applicable rate for the incremental term loan will be increased so that the effective yield for the incremental loan is equal to the effective yield for the other term facility minus 50 bps.

The incremental term loan was issued at an original issue discount of 99.

According to the filing, the joinder agreement adds a covenant that limits the company's capital expenditures to $40 million in any fiscal year.

The company is required to make quarterly repayments on the incremental term loan in an amount equal to 0.25% of the original principal amount. The remaining outstanding principal is due Aug. 15, 2018.

In addition to the mandatory prepayments, the company is required to prepay the loan based on a percentage of excess cash flow and with proceeds from a cash settlement of any disputed property tax assessment if the total leverage ratio is greater than 4.5 times.

In the event of a full or partial prepayment within two years of the funding of the incremental term loan, that prepayment will include a premium of 2% if it is made in the first year and 1% if made in the second year.

Proceeds were used to repay the company's outstanding 9½% senior secured notes due 2015.

Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Nomura Securities International, Inc. are the joint lead arrangers and joint bookrunners.

Marina District Finance is the Atlantic City, N.J.-based owner and operator of Borgata Hotel Casino and Spa.

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