Affinity talks $95 million second-lien term loan at Libor plus 825 bps

By Sara Rosenberg

New York, Sept. 14 – Affinity Gaming is talking its $95 million eight-year second-lien term loan (B3/CCC+) at Libor plus 825 basis points with a 1% Libor floor and an original issue discount of 98.5, according to a market source.

The second-lien term loan has call protection of 102 in year one and 101 in year two.

The spread, floor and call protection talk on the second-lien term loan matches what the company outlined in prior filings with the Securities and Exchange Commission.

Along with the second-lien term loan, the company is shopping a $30 million incremental first-lien term loan due July 1, 2023 (B1/B+), and original issue discount talk on that debt emerged at 99.5, the source said.

As previously reported, pricing on the incremental first-lien term loan matches existing first-lien term loan pricing at Libor plus 400 bps with a 1% Libor floor.

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

Proceeds from the new debt and equity will be used to 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.

With this transaction, the company is seeking an amendment to its existing $375 million first-lien term loan (B1/B+) due July 1, 2023 to allow for the new debt and permit restricted payments sufficient to complete the buyout.

Lenders are being offered for the amendment a 10 bps fee upon consent and a 10 bps fee upon closing, the source added.

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.

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.

The amendment would become effective on the buyout closing date.

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

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