Casino operator Penn National Gaming gets USD 274M debt repayment from California tribe

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 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

”

“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," Timothy J. Wilmott, President and Chief Executive Officer of Penn National, commented.

“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.”