Penn National secures new us$ 2.15 billion senior secured credit facilities

The new senior secured credit facilities replace the company's existing us$ 640.6 million revolving credit facility due July 2012 and us$ 1.52 billion secured Term Loan B facility due October 2012.

Penn National's new senior secured credit facilities extend the company's existing maturities, improve financial flexibility, and continue to allow for debt and equity repurchases (as authorized by the Board of Directors).

Reflecting the new senior secured credit facilities, Penn National's credit structure is comprised of:  us$ 700 million revolving credit facility (nothing drawn at closing) due July 2016 and currently priced at 175 basis points over LIBOR;  us$ 700 million Term Loan A due July 2016 and currently priced at 175 basis points over LIBOR;  us$ 750 million Term Loan B due July 2018 and priced at 275 basis points over LIBOR subject to a LIBOR floor of 100 basis points; us$ 250 million in principal of 6¾% Senior Subordinated Notes due August 2015; and us$ 325 million in principal of 8¾% Senior Subordinated Notes due March 2019.

Under the terms of the new senior secured credit facilities, Penn National has the ability to increase the amounts of the facilities at prevailing market rates, subject to obtaining commitments from lenders, pro forma compliance with financial covenants and other customary conditions. Financial maintenance covenants will remain the same as in the previous agreement, with no future step downs.

The facilities provide the company with increased flexibility to make investments and eliminate limits on the firm’s capital expenditures.

William J. Clifford, CFO of Penn National Gaming commented, "The new senior secured credit facilities acknowledge the company's financial strength, liquidity and strong cash flows and reflect our continued focus on actively and conservatively managing our capital structure to provide the financial flexibility to support our near- and long-term growth initiatives. The refinancing of our core credit facilities establishes Penn National with one of the most attractive costs of capital in the gaming industry.”

He continued: “Our leverage ratios remain well below industry averages and we continue to ensure that the Company has access to capital at rates which allow us to pursue a diverse range of opportunities to enhance shareholder value. With the opening next year of three full casinos we will further diversify our sources of cash flow which will allow us to maintain attractive leverage ratios and high levels of liquidity."

Bank of America Merrill Lynch, Commerz Markets, RBS Securities, UBS Securities and Wells Fargo Securities acted as joint lead arrangers with Wells Fargo Bank, National Association acting as administrative agent.