Penn National to Apply Approximately $274 Million to Debt Reduction
WYOMISSING, Pa.--(BUSINESS WIRE)--Oct. 20, 2016--
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the
“Company”) announced today that an affiliate of the Jamul Indian Village
of California (“JIV” or the “Tribe”) has completed an approximately $460
million refinancing related to the recently opened Hollywood Casino
Jamul – San Diego (the “Casino”). Since 2012, Penn National has provided
approximately $331 million in financing to the project to develop and
construct the Casino and to purchase certain Tribal debt. JIV intends to
use the net proceeds from the refinancing to repay development costs
(including those advanced by Penn National), to retire tribal debt and
for working capital. Penn National has been repaid approximately $274
million of the capital that it advanced for the development and
construction of the property, the acquisition of Tribal debt and accrued
interest. The Company intends to primarily use these funds to reduce
borrowings under its credit facilities. Penn National is continuing to
provide a portion of the project’s financing, including a Term Loan C
facility of up to $108 million and a Term Loan C delayed draw commitment
of up to $15 million. These loans are due in 2022 and are priced at
LIBOR plus 8.50% with a 1% LIBOR floor. Penn National has also agreed to
fund up to $5 million of subordinated debt to cover incremental project
costs at a higher interest rate.
Timothy J. Wilmott, President and Chief Executive Officer of Penn
National, commented, “We are proud to have funded the construction and
opening of Hollywood Casino Jamul – San Diego, and to support the JIV in
securing a post-opening financing facility that, combined with the
Casino operations, will help the Tribe realize its goal of becoming
economically self-sufficient. The financing package we are announcing
today reflects Penn National’s continued focus on actively and
conservatively managing our capital structure to provide the financial
flexibility to support our near- and long-term growth initiatives.
“We intend to use the approximately $274 million of proceeds we are
receiving to reduce borrowings under our credit facilities and further
strengthen our liquidity position. Pro forma for the recent debt
repayments, our total gross leverage ratio at September 30 declined to
approximately 5.76x. Furthermore, with the addition of fees resulting
from the Jamul management and licensing agreements to our existing
operating base and our other recently announced accretive transactions,
Penn National has further diversified our free cash flow mix, allowing
us to continue to reduce leverage and maintain high levels of liquidity.”
In addition to providing the revolving credit facility, Citizens Bank,
Fifth Third Bank and Goldman Sachs acted as joint lead arrangers.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming
and racing facilities and video gaming terminal operations with a focus
on slot machine entertainment. At June 30, 2016, the Company operated
twenty-six facilities in sixteen jurisdictions, including Florida,
Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi, Missouri,
Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West
Virginia, and Ontario. At June 30, 2016, in aggregate, Penn National
Gaming operated approximately 33,400 gaming machines, 800 table games
and 4,600 hotel rooms.
Forward-looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the use of forward looking terminology
such as “expects,” “believes,” “estimates,” “projects,” “intends,”
“plans,” “seeks,” “may,” “will,” “should” or “anticipates” or the
negative or other variations of these or similar words, or by
discussions of future events, strategies or risks and uncertainties,
including future plans, strategies, performance, developments,
acquisitions, capital expenditures, and operating results. Actual
results may vary materially from expectations. Although the Company
believes that our expectations are based on reasonable assumptions
within the bounds of our knowledge of our business, there can be no
assurance that actual results will not differ materially from our
expectations. Meaningful factors that could cause actual results to
differ from expectations include, but are not limited to, risks related
to the repayment or subordination of the loans described herein,
sovereign immunity, local opposition (including several pending
lawsuits), access, regional competition and property performance and
other factors as discussed in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2015, subsequent Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, each as filed with the United
States Securities and Exchange Commission. The Company does not intend
to update publicly any forward-looking statements except as required by
law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not occur.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161020006513/en/
Source: Penn National Gaming, Inc.
Penn National Gaming, Inc.
Saul V. Reibstein
Chief Financial
Officer
610-373-2400
or
JCIR
Joseph N. Jaffoni,
Richard Land
212-835-8500
penn@jcir.com
