Affinity Gaming plans $95 million second-lien term loan for buyout

By Sara Rosenberg

New York, Aug. 23 – Affinity Gaming plans on getting a $95 million eight-year second-lien term loan to help fund its acquisition by Z Capital Partners LLC and intends to amend its existing first-lien credit facility, according to an SC 13D/A filed with the Securities and Exchange Commission on Tuesday.

Citizens Bank is the lead arranger on the second-lien term loan.

Pricing on the second-lien term loan is expected at Libor plus 825 basis points with a 1% Libor floor, and the debt would include call protection of 102 in year one and 101 in year two, the filing said.

The company also plans to seek an amendment on or prior to Sept. 30 to its existing credit agreement to allow for the new second-lien term loan, add a $30 million first-lien term loan and permit restricted payments sufficient to complete the buyout.

Credit Suisse is the administrative agent on the existing credit facility.

The amendment would become effective on the buyout closing date.

If an amendment is not obtained, the company has received from Citizens Bank a commitment for a $40 million five-year revolver expected at Libor plus 400 bps and $330 million seven-year first-lien term loan expected at Libor plus 400 bps with a 1% Libor floor and 101 soft call protection for six months.

The new revolver and first-lien term loan would be done in addition to the second-lien term loan.

Under the agreement, Z Capital, which currently own about 41% of Affinity’s outstanding shares, will purchase the remaining outstanding shares for $17.35 per share in cash. The transaction values Affinity at about $580 million.

Other funds for the transaction will come from equity.

Closing is expected in the first quarter of 2017, subject to shareholder approval, regulatory approvals, including by gaming regulators in the four states in which Affinity is licensed, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary conditions.

Affinity Gaming is a Las Vegas-based diversified casino gaming company.

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