Gateway Casinos gets tenders for 83% of 8 7/8% notes by early deadline

By Susanna Moon

Chicago, Nov. 20 - Gateway Casinos & Entertainment Ltd. said investors had tendered C$140,927,000, or about 82.9%, of its C$170 million outstanding aggregate principal amount of 8 7/8% second-priority senior secured notes due 2017 as of 5 p.m. ET on Nov. 18, the early tender date.

As a result of obtaining the required consents, Gateway will execute a supplemental indenture to the notes, which will become operative when the tendered notes are purchased, according to a company press release.

Gateway is soliciting consents to amend the notes to eliminate most of the restrictive covenants and events of default, release the guarantees of the guarantors under the indenture and release all of the collateral securing the obligations of the company, as previously announced.

The total purchase price will be C$1,066.56 per C$1,000 principal amount of notes tendered by the early tender deadline.

The total payment includes an early tender premium of C$30.00 per C$1,000 principal amount.

Holders who tender their notes and deliver their consents after the early deadline will receive the total payment less the early tender premium.

The tender offer will end at 11:59 p.m. ET on Dec. 3.

Tendered notes may no longer be withdrawn, as of the early deadline.

Holders may not tender their notes without delivering their consents or vice versa.

The offer is conditioned on the company receiving the required consents for the proposed amendments and the completion of refinancing.

Gateway is in the market with a C$340 million credit facility and began an investor roadshow in Toronto for an offering of up to C$220 million of seven-year second-priority senior secured notes, as previously reported by Prospect News.

TD Securities Inc. (416 982-2243 collect) is the dealer manager. CST Phoenix Advisors (800 833-2158 or 201 806-2222 banks and brokers) is the information agent. Computershare Investor Services Inc. (800 564-6253 or 514 982-7555 collect) is the depositary.

The Gateway portfolio of gaming properties includes Grand Villa Casino Hotel & Conference Centre in Burnaby, Starlight Casino in New Westminster, Cascades Casino Hotel & Convention Centre in Langley, Lake City Casinos in Vernon, Kamloops, Kelowna and Penticton, Baccarat Casino and Palace Casino in Edmonton and Community Gaming Centres in Mission, Squamish and Surrey. The company is based in Burnaby, B.C.

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