Sugarhouse increases term loan to $165 million, revises covenants

By Sara Rosenberg

New York, Sept. 10 - Sugarhouse HSP Gaming Prop. Mezz LP (Sugarhouse Casino) upsized its term loan to $165 million from $150 million and changed covenants, according to a market source.

Pricing on the term loan was left unchanged at Libor plus 825 basis points with a 3% Libor floor and an original issue discount of 96.

The company's $10 million revolver and $20 million delayed-draw term loan were left unchanged in terms of size and pricing, which is set at Libor plus 825 bps with a 3% Libor floor as well.

Sugarhouse also increased its furniture, fixtures and equipment loan to $35 million from $30 million and decreased the seller note to $9.2 million from $9.7 million.

As a result of the size changes, the minimum interest coverage ratio was changed to 1.75 times for all projected periods, and the maximum total leverage ratio was changed to 4.85 times for fourth-quarter 2010 through third-quarter 2011, 4.75 times for fourth-quarter 2011 through second-quarter 2012, 4.6 times for third-quarter 2012, 4.45 times for fourth-quarter 2012 through first-quarter 2013, 4.35 times for second-quarter 2013 through third-quarter 2013, and 4.05 times for fourth-quarter 2013 and thereafter.

Credit Suisse and Jefferies are the lead banks on the now $195 million credit facility (B3/B-) that will be used to fund the construction of the Sugarhouse Casino on the Delaware River in Philadelphia by HSP Gaming, LP.

The incremental $20 million of proceeds raised through the size changes, excluding the seller note, will be used to fund about $2.7 million of additional development costs, reimburse the sponsor for roughly $15.3 million of previously paid development costs and fund about $2 million of incremental interest expense reserve.

Recommitments were due from lenders at noon ET on Thursday.

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