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Pinnacle Entertainment Announces Commitments For $325 Million Incremental Term Loan

Stocks in this article: PNK

LAS VEGAS, March 8, 2012 /PRNewswire/ -- Pinnacle Entertainment, Inc. (NYSE: PNK) announced today that it has received commitments from a syndicate of lenders for a $325 million incremental term loan under its current credit facility.  The term loan will be issued at a price of 99.0% with an interest rate of 300 basis points over LIBOR and a 1.0% LIBOR floor. Pinnacle was originally seeking commitments for a $250 million incremental term loan under its current credit facility.

The term loan is expected to mature in March 2019, provided that such date will be accelerated to (a) December 15, 2014 if any portion of the Company's 7.5% senior subordinated notes due 2015 are outstanding on December 15, 2014, and (b) May 1, 2017 if any portion of the Company's 8.625% senior notes due 2017 are outstanding on May 1, 2017.  The closing of the term loan is conditioned on final documentation and other customary closing conditions.

Pinnacle intends to use a portion of the net proceeds of the term loan to redeem a portion of its 7.5% senior subordinated notes due 2015 at a redemption price equal to 103.75% of par, plus accrued and unpaid interest.  The Company also intends to use a portion of the net proceeds of the term loan to repay all revolving credit borrowings outstanding under its credit facility. Additional net proceeds of the term loan will be used to continue development at the company's L'Auberge Casino & Hotel in Baton Rouge and its River City Casino in St. Louis, for possible future development at its River Downs racetrack in Cincinnati and for general corporate purposes.  The term loan is expected to reduce the Company's need to draw on its $410 million revolving credit facility for future operations and these development opportunities.

This press release shall not constitute a notice of redemption of the Company's 7.5% senior subordinated notes due 2015, and any redemption will be done in accordance with the terms of the indenture governing such notes.

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