Affinity to launch $125 million in new loans, amendment on Tuesday

By Sara Rosenberg

New York, Sept. 12 – Affinity Gaming is set to hold a lender call at 2 p.m. ET on Tuesday to launch $125 million in new term loan debt and an amendment to its existing $375 million first-lien term loan (B+) due July 1, 2023, according to market sources.

The new debt includes a $30 million incremental first-lien term loan due July 1, 2023 (B+) and a $95 million eight-year second-lien term loan (CCC+), sources said.

Pricing on the incremental first-lien term loan matches existing first-lien term loan pricing at Libor plus 400 basis points with a 1% Libor floor.

The incremental first-lien term loan and existing first-lien term loan will get 101 soft call protection for six months.

The original issue discount on the incremental first-lien term loan, and price talk and call protection on the second-lien term loan are still to be determined, the source continued.

Previously, filings with the Securities and Exchange Commission said that the second-lien term loan is expected at Libor plus 825 bps with a 1% Libor floor and would include call protection of 102 in year one and 101 in year two.

Citizens Bank, Credit Suisse Securities (USA) LLC and Fifth Third are the leads on the new debt, and Credit Suisse is the lead on the amendment.

Commitments are due at 5 p.m. ET on Sept. 23, the source added.

Proceeds from the new debt will be used to help fund the buyout of the company by Z Capital Partners LLC, which currently owns about 41% of Affinity’s outstanding shares.

Z Capital will purchase Affinity’s 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.

The amendment to the existing first-lien term loan will allow for the new debt and permit restricted payments sufficient to complete the buyout.

The amendment would become effective on the buyout closing date.

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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