Daily News: November 2, 2018

Wells Fargo Agents $650MM Facility for Churchill Downs Casino Recap

Churchill Downs signed a definitive purchase agreement to acquire certain ownership interests in Midwest Gaming Holdings, the parent company of Rivers Casino Des Plaines in Des Plaines, IL.

Following the closing of the sale, the parties plan to enter into a recapitalization transaction, with Midwest Gaming using $300 million in proceeds from new credit facilities to redeem, on a pro rata basis, additional Midwest Gaming units held by Rush Street and Casino Investors.

The new credit facilities will be comprised of an amended and extended revolving credit and term loan agreement with one of Midwest Gaming’s wholly-owned subsidiaries for up to $650 million, as well as approximately $200 million in mezzanine debt incurred directly by Midwest Gaming. After the recap, approximately $50 million of the senior credit facility would remain unfunded and available for general corporate purposes.

On the senior credit facility, Wells Fargo Bank served as administrative agent, Wells Fargo Securities as left lead arranger and left bookrunner, Fifth Third Bank, CIBC Bank USA and U.S. Bank as joint lead arrangers, joint bookrunners and co-syndication agents and Merrill Lynch as joint lead arranger, joint bookrunner and documentation agent.

The sale transaction and recapitalization will result in Churchill Downs owning at least 50.1% of Midwest Gaming.

Post-closing, CDI and Rush Street will jointly control Rivers Des Plaines, with Rush Street and the Rush Street-led management managing the day-to-day operations of the casino.

“We are thrilled to partner with Neil Bluhm and Rush Street Gaming in Rivers Des Plaines. This property is the crown jewel of Illinois gaming and one of the country’s premier casinos,” said Churchill Downs CEO Bill Carstanjen. “This is an exciting opportunity for CDI, given Rivers Des Plaines’ superior design, unparalleled location in the Chicagoland market, high-quality amenities and outstanding team.”

The transactions are contingent upon approval by the Illinois Gaming Board and other customary closing conditions and are anticipated to close in the first half of 2019.

Sidley Austin is representing CDI in the Transactions, with Kirkland & Ellis representing Rush Street and Vedder Price representing Clairvest in the Transactions. Greenberg Traurig is representing Midwest Gaming on gaming matters.