Tropicana Announces Reduction in Interest Rates on Credit Facilities
JUNE 6, 2007. Tropicana Entertainment, LLC, an indirect subsidiary of Tropicana Casinos and Resorts, Inc., announced today that a syndicate of lenders led by Credit Suisse has agreed to reduce by 0.25% the interest rates applicable to approximately $2.0 billion under two credit facilities obtained by the Company and its subsidiaries in the first quarter of 2007 in order to, among other things, fund the acquisition of Aztar Corporation. The rate changes became effective May 29, 2007 and were achieved as a result of improved conditions in debt capital markets since the loans were obtained.
On January 3, 2007, the Company closed on its senior secured Credit Facility, the interest rate for which is set periodically based on a published LIBOR rate, or an alternate base rate, plus an applicable margin. The governing credit documentation has been amended to reduce the margin applicable to LIBOR rate borrowings from 2.50% to 2.25% and alternate base rate borrowings from 1.50% to 1.25%. The Credit Facility currently has an aggregate principal amount of about $1.4 billion outstanding. The Credit Facility also has a revolving credit line of up to $180 million, which is currently undrawn. Concurrently with the closing of the Credit Facility, the Company also entered into a 5-year interest rate swap transaction which effectively fixed the LIBOR rate applicable to $1.0 billion of the indebtedness at 5.00% for the term of the loan.
On January 3, 2007, Tropicana Las Vegas Finance Co., also an indirect subsidiary of the Company, closed on a secured credit facility (the "Las Vegas Land Loan") in an aggregate principal amount of $440 million, the interest rate for which is set periodically based on a published LIBOR rate, or an alternate base rate, plus an applicable margin. The governing credit documentation has been amended to reduce the margin applicable to LIBOR rate borrowings from 2.50% to 2.25% and alternate base rate borrowings from 1.50% to 1.25%. Concurrently with the closing of the Credit Facility, the Company entered into an 18-month interest rate swap transaction which effectively fixed the LIBOR rate applicable to all of the Land Loan indebtedness at 5.01% for the term of the loan.
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