Yonkers Racing ups consent fee, amends offer terms for 11 3/8% notes

By Susanna Moon

Chicago, April 26 - Yonkers Racing Corp. said it amended the terms of the consent solicitation for its 11 3/8% senior secured notes due 2016 after discussions with some noteholders.

Yonkers increased the consent fee to $12.50 for each $1,000 principal amount of notes, up from $10.00 per $1,000 of notes, according to a company press release.

In addition, Yonkers is offering to eliminate its right to redeem up to $22.5 million principal amount of the notes at 103 in each 12-month period ending on July 14, 2012 and July 14, 2013.

The company previously exercised that right for the 12-month period ending July 14, 2011.

Yonkers said it believes that the elimination of the right is a benefit to noteholders and can be effected without the consent of any holder.

Accordingly, Yonkers said that if it receives consents from holders of at least a majority of the notes, the supplemental indenture that contains the proposed amendments will also eliminate the redemption right.

As previously noted, the proposed amendments would permit the company to issue up to an additional $100 million of the notes and use a portion of the proceeds to redeem all of its 13¼% senior subordinated notes due 2013, including accrued pay-in-kind interest and a premium, and repurchase all of its class A common stock warrants.

The changes also include the modification of an additional provision in the indenture that restricts Yonkers' ability to form and make investments with certain unrestricted subsidiaries.

In a previous news release, the company said that it believes current market conditions may provide an opportunity to refinance the subordinated notes on favorable terms, including a lower interest rate.

The solicitation will expire at 5 p.m. ET on April 28. The offer began on April 20.

If the company obtains consents from holders of at least a majority of the notes and completes its private offering of the additional notes, it will pay a consent fee.

On April 20, Yonkers also disclosed plans to bring to market a $100 million add-on to its 9 3/8% senior secured notes due 2018. A portion of the note proceeds will be used to redeem all of the 13¼% notes and repurchase class A stock warrants.

Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are the solicitation agents, and D.F. King & Co., Inc. is the tabulation agent (212 493-6996 for banks and brokers or 800 487-4870).

The issuer is a Yonkers, N.Y.-based horse racing and gaming company.

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