Penn’s new senior secured credit facilities are comprised of a $700 million revolving credit facility with a maturity of five years, a $300 million term loan A facility with a maturity of five years and a $500 million term loan B facility with a maturity of seven years.
According to a related 8-K filing, Bank of America served as administrative agent and collateral agent for the transaction. Bank of America, JPMorgan Chase, Fifth Third Bank, Citizens Bank, U.S. Bank, Wells Fargo Securities, M&T, SunTrust Robinson Humphrey, Goldman Sachs, TD Securities and UBS Securities served as joint lead arrangers and joint physical bookrunners.
JPMorgan Chase, Fifth Third Bank, Citizens Bank, U.S. Bank, Wells Fargo Securities, M&T, SunTrust Robinson Humphrey, Goldman Sachs, TD Securities and UBS Securities served as syndication agents.
The interest rates applicable to loans under the new credit facilities are, at Penn’s option, equal to either a LIBOR rate or a base rate plus an applicable margin. The applicable margin for the revolving credit facility and the term loan A is initially 2.25% for LIBOR loans and 1.25% for base rate loans until Penn provides financial reports for the first full fiscal quarter following closing. Thereafter, the rate will range from 1.25% to 3.00% per annum for LIBOR loans and 0.25% to 2.00% per annum for base rate loans, in each case depending on Penn’s total net leverage ratio. The applicable margin for the term loan B is 2.50% for LIBOR loans and 1.50% for base rate loans. The term loan B is also subject to an interest rate floor of 0.75% for LIBOR loans and 1.75% for base rate loans. Unused commitments under the revolving credit facility are subject to a commitment fee of 0.35% per annum, until Penn provides financial reports for the first full fiscal quarter following closing and, thereafter, 0.20% to 0.50% per annum, depending on Penn’s total net leverage ratio.
Penn CFO B.J. Fair said, “The new senior secured credit facilities acknowledge the company’s financial strength, liquidity and strong free cash flow generation and reflect the company’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. Additionally, the refinancing of our credit facilities and the completion of our other previously announced refinancing transactions position Penn with one of the most attractive weighted average cost of capital in the gaming industry, which allows us to pursue a diverse range of opportunities to enhance shareholder value.”
The proceeds of the initial funding under the new credit facilities, together with any remaining proceeds from the other refinancing transactions, were used to refinance Penn’s existing credit facilities and fund related transaction fees and expenses, with remaining proceeds to be available for general corporate purposes.
Wyomissing, PA-based Penn National Gaming is a diversified, multi-jurisdictional owner and manager of gaming and racing facilities and video gaming terminal operations.