Gateway Casinos & Entertainment Limited has completed refinancing of corporate debt in a $1.25 billion transaction, announced the Canadian operator on Monday. The transaction includes refinancing of the entire Capital Structure and repayment of CAD $200 million of outstanding LEEFF loan facility.
The company said it closed the $1.25 billion Senior Secured Term Loan B issuance to refinance its capital structure and fund cash to the balance sheet, with funds managed by affiliates of Fortress Investment Group LLC as lead investors in the transaction.
In a statement following the refinancing, Executive Chairman of Gateway Gabriel de Alba remarked Gateway’s positive results after re-opening operations in the third quarter: “The company’s focus on operational discipline, including a more streamlined cost structure, and our focus on our guest experience, has led to performance that has exceeded our expectations.
The assistance of the Canadian government’s LEEFF program to support employers hit by the pandemic contributed to the company’s ability to move after the restrictions and to preserve liquidity as much as possible throughout the closures, remarked the Executive Chairman. The loan, agreed to in September 2020, has now been repaid.
“We are grateful for the ongoing support of all our stakeholders and regulatory partners and proud to have now strengthened our capital position which will support our future growth initiatives, including online gaming opportunities,” added de Alba.
Gateway’s Chief Executive Officer Tony Santo remarked how the company has generated “higher property-level operating margins and adjusted EBITDA than expected” following reopening of its British Columbia and Ontario operations.
Santo considers that this momentum, coupled with the refinancing of the entire capital structure, will permit Gateway to restart its development projects and drive performance. The Senior Secured Term Loan B term loan tranches mature 6 years from the closing date, providing the company “with significant maturity runway and additional liquidity to fund its operations.”
The operator, one of the largest gaming and entertainment companies in Canada, counts with 26 gaming properties in British Columbia and Ontario, plus two additional properties in Edmonton, Alberta. As of July 14, 2021, the company had approximately 6,500 employees in British Columbia and Ontario.
Earlier this year, the operator resumed construction of its upcoming Cascades Casino in North Bay (Ontario), which was halted for several months due to COVID-19 restrictions. The 39,000 square-foot casino was first proposed in 2019 and was expected to be open by mid-July 2020.