Casino gambling operators, having lived through greater than a year of plummeting earnings and bankruptcy dangers enhanced by liquidity difficulties, are breathing just a little easier as signs of a thaw within the credit freeze have appeared. While not at the same generous terms as previously, gaming companies are finding it possible to arrange debt and procure new loans to retire debts approaching maturity.Both Harrah's Entertainment and Ameristar Casinos have purchased existing debt with cash raised from private offerings of recent senior notes, giving Ameristar another $650 million and Harrah's $1 billion to ease cash woes. Success in issuing the notes tells gaming analysts that investors are willing to bet at the casino operators' survival.
"For Harrah's with the intention to issue means there's appetite for the riskiest names within the gaming sector," Chris Snow, a gambling analyst at CreditSights, told the Wall Street Journal.
Snow said that securing the bonds with casinos as collateral, and accepting higher yields at the investments, helped the casino companies bring new investors forward.
MGM Mirage used liens against the Bellagio Casino and the Mirage Casino, two of its prized Las Vegas Strip properties, to ensure repayment on a up to date $1.5 billion bond issue.
Analysts say the upward push in value of Ameristar stock and its regional facing operation yield a better credit rating, preventing the corporate from putting up casinos to back its notes. But general loosening of the credit market is perceived, as well.
"It's a better time to get a secured deal done, certainly for the more distressed operators," said Michael Paladino, senior director of gaming at Fitch Ratings.
Published on May 28, 2009 by K.C.Carmichael
Read More... [Source: MGM Casinos in the News]
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