This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Hard Rock is Low on Chips With Debt Payment Due

Stocks in this article: MHGC

NEW YORK (The Deal) -- The owner and operator of the Hard Rock Hotel & Casino Las Vegas has until June 2 under a forbearance agreement to make up the interest that it owes to its lender, but filings suggest that even then the company won't be able to pay it.

BREF HR, which was formed by affiliates of property, power and infrastructure asset manager Brookfield Asset Management in 2011 in order to take over ownership of the hotel and casino through a transaction in lieu of a foreclosure, owes $44.3 million in pay-in-kind interest to its lender, Vegas HR Private Ltd., on roughly $902.5 million in debt due March 1, 2018, and priced at Libor plus 250 basis points with a 1.5% floor on Libor.

The PIK interest was due on March 1, but the company failed to pay it then. Vegas HR agreed to give BREF more time through a forbearance agreement that expires on June 2.

"Currently, the company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014," it said in its annual report filed with the SEC on May 9.

There is also supplemental interest on the $902.5 million equal to the greater of 6.5% or Libor plus 400 basis points. The $61.2 million in outstanding supplemental interest loan can be paid-in-kind, too, according to filings with the Securities and Exchange Commission said. This supplemental interest appears to be separate from the $44.3 million PIK interest.

According to the financial report, the company is currently assessing its options to satisfy the $44.3 million PIK interest payment obligation, including negotiating a waiver of the requirement from the lender, selling off a portion of existing collateral or attempting to obtain borrowings from other sources.

BREF warned in the filing that if it's unable to restructure its debt or find alternative financing, "we risk losing some or all of our property to foreclosure." BREF in the annual report raised substantial doubt about its ability to continue as a going concern, citing years of losses and its June 2 deadline to pay the PIK interest. If the company fails to pay the PIK interest by the deadline, the lender could declare all of its debt due.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs