Bally announces new us$ 300 million share repurchase authorization

The company is entering into an accelerated share buyback agreement with JPMorgan Chase Bank, NA on April 24, 2013 under which it will purchase up to us$ 150 million worth of stock under the new share repurchase program. The company also announced it has increased the existing credit facility by us$ 400 million, to a total of us$ 1.1 billion, and extended the maturity of the facility to April 2018.

“We are extremely pleased with the terms of our amended credit facility and with the additional capital raised,” said the firm’s Chief Financial Officer Neil Davidson.  “Our increased revolver capacity and modest leverage provide Bally with ample liquidity to fund additional share repurchases and potential acquisitions, as well as make further investments in our business.  After funding the accelerated share buyback, we will have undrawn revolver capacity of approximately us$ 435 million.”

Key aspects of the amendment are as follows: 

•  Improved leveraged-based pricing grid whereby the total leverage ratio for each applicable rate and undrawn fee tier was increased by 0.25 turns; 

•  Maximum total leverage ratio to be 3.5 turns for the life of the facility; 

•  No limitations on restricted payments (which includes share repurchases) provided the Company’s Maximum Leverage Ratio is under 2.75 turns and us$ 150 million per year if above; and Under the terms of the accelerated share buyback agreement, the Company will pay JP Morgan Chase Bank, NA us$ 150 million on or about April 26, 2013 and will receive the initial delivery of approximately 2.5 million shares, representing a substantial majority of the shares expected to be repurchased over the course of the accelerated share buyback.

The total number of shares ultimately repurchased under the agreement will be determined based on the daily volume-weighted average share price of Bally’s common stock during the repurchase period less a discount.  The company will fund the accelerated share buyback with borrowings under its revolving credit facility and excess cash on hand.