Affinity tightens issue price on incremental first-lien term loan

By Sara Rosenberg

New York, Sept. 23 – Affinity Gaming revised the issue price on its $30 million incremental first-lien term loan due July 1, 2023 (B1/B+) to par from 99.5, according to a market source.

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, and all of the first-lien term loan debt is getting 101 soft call protection for six months.

Along with the incremental first-lien term loan, the company is in market with a $95 million eight-year second-lien term loan (B3/CCC+) talked at Libor plus 825 bps with a 1% Libor floor and an original issue discount of 98.5.

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

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.

The amendment request underwent some changes, including increasing the consent fee to 20 bps at the closing of the amendment and 20 bps at the completion of the transaction, from 10 bps at amendment closing and 10 bps at transaction closing, the source said.

Also, the unlimited restricted payments incurrence ratio is now increasing to 3.25 times from 3 times, instead of increasing to 3.5 times, and the unlimited investments incurrence ratio test in now increasing to 4 times from 3.5 times, instead of increasing to 4.5 times.

Furthermore, the company is no longer seeking changes to the eligible assignee/disqualified institution provisions, the source continued.

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

Commitments and consents were scheduled to be due at 5 p.m. ET on Friday, the source added.

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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