(Read more on the debt and equity markets.)
ATLANTIC CITY-Trump Entertainment Resorts Inc.'s Atlantic City portfolio, which has faced difficulties in the past, might find its burdens easing as the company refinances the first-lien debt on its properties here with a $493.25-million credit facility courtesy of Plano, TX-based Beal Bank Nevada. The new loan carries an interest rate of Libor plus 3.2% and has a five-year maturity period.
According to John Burke, EVP, corporate treasurer and interim CFO of Trump Entertainment, the organization previously had a $200-million revolving loan and $300 million in term loans. "We were considering amendments to the loans and had an opportunity to refinance, so we took the opportunity to refinance the loan in its entirety," Burke tells GlobeSt.com.
By refinancing, the maturity date of the loan has been moved back to 2012 from the original 2010, giving the company some breathing room. In addition, requirements to maintain certain leverage, first lien leverage and interest coverage ratios have been removed. "That takes any uncertainty out of us having those funds available," Burke reports.
Trump Entertainment's Atlantic City properties have endured a number of difficulties over the years, including a Chapter 11 filing in 2004. The company's filing listed $1.3 billion in debt and $1.5 billion in assets at the time. Trump Atlantic City also appeared in bankruptcy court in 1992.
To help drive revenues, Trump Entertainment announced a plan to overhaul its three Atlantic City properties, the Trump Taj Mahal, which opened in 1990, Trump Plaza, which debuted in 1984 and Trump Marina, which was completed in 1985. The company announced a plan to renovate all three properties in 2005 at a cost of $110 million.
In 2006, the company unveiled plans for a $250-million, 800-room addition to the Trump Taj Mahal. Work on the addition began in August 2006 with completion slated for summer 2008. According to Burke, some of the refinancing money will go toward the Taj Mahal expansion.
The company hit another bump in the road in July 2007, when plans to sell the three casino resorts were scrapped after Trump Entertainment failed to reach an agreement with prospective buyers. In its third quarter 2007 report, the company posted a loss of $7.3 million in net revenues compared with the same period in 2006.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
