AC Ocean Walk to launch $250 million in term loans on Wednesday

By Sara Rosenberg

New York, Dec. 5 – AC Ocean Walk LLC is set to hold a bank meeting at 10 a.m. ET in New York on Wednesday to launch $250 million in term loans, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner on the deal.

The debt consists of a $175 million five-year first-lien term loan and a $75 million 5.5-year second-lien term loan, the source said.

Price talk on the first-lien term loan is Libor plus 800 basis points with a 1% Libor floor and an original issue discount of 99, and talk on the second-lien term loan is 12% PIK toggle based on a leverage grid and a discount of 99, the source continued.

The first-lien term loan has hard call protection of 102 in year one and 101 in year two and an interest reserve through June 30, 2019, and the second-lien term loan call protection is still to be announced.

The second-lien loan has warrants for 5% of the equity.

Financial covenants include a total leverage ratio.

Commitments are due at 5 p.m. ET on Dec. 14, the source added.

Proceeds will be used to finance the acquisition and reopening of the Atlantic City, N.J., casino resort (AC Ocean Walk) formerly known as Revel Atlantic City.

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