Trump Hotels postpones $470 million bond deal

New York, May 17 - Trump Hotels and Casino Resorts, Inc. said it postponed its planned $470 million offering of mortgage notes.

The New York-based gaming company said the interest rates on offer were "unacceptable."

Trump Hotels said it intends to return to the capital markets later in the year when it believes it will be "better served" thanks to its "tremendous improvement in operating cash flow" and "favorable near term outlook."

The company had been proposing to sell $340 million of first mortgage notes (B3/B-) and $130 million of second mortgage notes (CCC) in a Rule 144A offering. Talk on the first mortgage notes was 9¾%-10% while the second mortgage notes were talked at 12¾%-13%. Both were due 2010. Bookrunner for the offering was Deutsche Bank Securities Inc.

The deal had already been restructured twice, first by splitting what was a single piece of first mortgage notes into two, then by supporting the deal with the Trump 29 Casino near Palm Springs. It had already been backed by the assets of Trump Marina Casino Resort in Atlantic City, N.J. and the company's Riverboat Casino in Gary, Ind.

Proceeds had been earmarked to repay or acquire virtually all the outstanding debt of Castle Associates and Trump Hotels & Casino Resorts Holdings LP, and the bank debt of Trump Indiana, Inc.

Announcing the postponement, Trump noted that Trump Marina's first "significant" debt of $242.1 million 11¾% mortgage notes does not mature until Nov. 15, 2003 while Trump Marina's $67 million 10¼% senior secured notes do not mature until April 30, 2003.

The company said it believes these senior notes are readily financeable.

"Our 45.9% increase in EBITDA for the first quarter 2002, which included a 61.7% increase for Trump Marina, a 48.3% increase for Taj Mahal, a 45.8% increase for Trump Plaza and a 17.5% increase for Trump Indiana, along with the equally encouraging second quarter results to date, affirm my belief that the company will be able to attain, subject to a continuation of strong business, a lower interest rate in the latter part of this year," said Donald J. Trump, the company's chairman, president and chief executive officer, in a news release. "With the summer season upon us, the opening of the 2,000 car Indiana garage and the approval of our Trump 29 Casino management agreement in Palm Springs, California, as well as the continued fine efforts by our management team, I am confident that a more attractive financing will be available to the company towards the end of this year."

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