Combined with Sale Leaseback Proceeds, Transaction Significantly Reduces Debt and Increases Liquidity to Support Investment Throughout the Gateway Portfolio
BURNABY, BRITISH COLUMBIA (March 13, 2018) — Gateway Casinos & Entertainment Limited (“Gateway” or “Company”) announced today that it has completed the previously announced transactions for the purpose of refinancing its existing credit facilities. The new credit facility includes a US$335 million senior secured term loan facility and a C$150 million senior secured revolving credit facility (of which US$25 million may be denominated in US Dollars) (together, the “New Senior Secured Credit Facility”). As previously announced, the New Senior Secured Credit Facility was increased by US$30 million from its original target as a result of strong investor demand.
The proceeds of the New Senior Secured Credit Facility will be used to (i) refinance the remaining commitments and loans under Gateway’s existing senior secured credit facility after giving effect to the repayment of the existing loans using the proceeds of the Company’s recently consummated sale-leaseback transaction; (ii) complete a return of capital, dividend or other similar distribution of approximately US$100 million; (iii) fund general corporate purposes (including capital expenditures); (iv) repay in full the mortgage on the Cascades Casino Langley; and (v) pay related fees and expenses incurred in connection with the foregoing
“Following the sale leaseback of three properties in Vancouver and the successful completion of a broad debt refinancing, Gateway is well positioned to invest in its operations and growth. Gateway has become the standard for gaming and hospitality in Canada and we look forward to continuing to build on our leadership position,” said Tony Santo, Gateway’s Chief Executive Officer.
“We are very pleased with the successful refinancing and the ability of our team to identify value creation opportunities and deliver on transactions that can add to the strength of the company,” said Gabriel de Alba, Gateway’s Executive Chairman. “We look forward to continuing to identify new avenues for growth and building on the company’s success across all of our operations.”
The transactions were executed by a syndicate of investment banks led by Morgan Stanley Senior Funding, Inc., and included SunTrust Robinson Humphrey, Inc., BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs Lending Partners LLC, Macquarie Capital (USA) Inc., National Bank of Canada, Canadian Imperial Bank of Commerce and ING Capital LLC.
Additionally, Gateway announced that it has executed a supplemental indenture to the indenture governing its 8.250% Second Priority Senior Secured Notes due 2024 (the “Notes”) following the previously announced successful receipt of consents from holders of more than a majority in aggregate principal amount of the outstanding Notes, which Gateway requested pursuant to its consent solicitation (the “Consent Solicitation”), as well as the satisfaction of the other conditions thereto. The supplemental indenture became effective upon execution, but will not become operative unless the applicable consent fee is paid. The complete terms and conditions of the Consent Solicitation are set forth in the Consent Solicitation Statement, dated February 26, 2018, as amended on March 6, 2018 (the “Consent Solicitation Statement”), which was sent to all holders of record of the Notes as of the record date.
Copies of the Consent Solicitation Statement and other related documents may be obtained from D.F. King & Co, Inc., the Information, Tabulation and Paying Agent, via email at firstname.lastname@example.org or via phone at +1 866-796-6867.
About Gateway Casinos & Entertainment
Gateway is one of the largest and most diversified gaming and entertainment companies in Canada. Operating in British Columbia, Edmonton and Ontario, Gateway has 6,000 employees and operates 25 gaming properties with 282 tables, over 9,500 slots, 68 restaurants and bars and 272 hotel rooms. As the selected service provider in Southwestern and Northern Ontario, Gateway will undertake two new planned builds in North Bay and Kenora. Gateway is undertaking an ambitious growth strategy to dramatically improve the customer experience and attract new customers. This includes the development of proprietary casino and food and beverage brands like Match Eatery & Public House and Atlas Steak + Fish. In 2017, Gateway celebrated 25 years in the business of gaming and entertainment in Canada. Further information is available at www.gatewaycasinos.com.
About The Catalyst Capital Group Inc.
The Catalyst Capital Group Inc., a private equity investment firm with more than $6 billion in assets under management founded in 2002, is a leader in operationally focused turnaround investing. The firm’s mandate is to manufacture risk adjusted returns, in keeping with its philosophy of “we buy what we can build.” Catalyst’s Guiding Principles of investment excellence through operational involvement, superior analytics, attention to detail, intellectual curiosity, team and reputation are key to the firm’s success. The Catalyst team collectively possesses more than 110 years of extensive experience in restructuring, credit markets and merchant and investment banking in Canada, the United States, Latin America and Europe.
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