Chester Downs talks $230 million seven-year term loan at 14% area

By Paul A. Harris

St. Louis, July 15 - Chester Downs set price talk for its $230 million Libor plus 900 bps seven-year secured term loan (B3/B) at the 14% area, according to a market source.

The loan will be offered to investors at an original issue discount which remains to be determined.

It features a Libor floor of 3%.

Citigroup, Bank of America, JPMorgan and Jefferies are the joint leads on the deal, with Citi the left lead.

The loan includes an incurrence-based high-yield covenant package.

Amortization is based on the company's total leverage ratio. If leverage is 3.25 to 1.00, then amortization is 7.5% per annum. If leverage is less than or equal to 3.25 to 1.00 and greater than 2.50 to 1.00, then amortization is 3.5% per annum. And, if leverage is less than or equal to 2.50 to 1.00, then amortization is 1.0% per annum.

Security is substantially all of the assets of the company.

Proceeds will be used to refinance existing debt and purchase partnership interests.

Chester Downs is the operator of a racetrack casino in Chester, Pa.

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