Pinnacle Entertainment Announces It is Seeking Amendment to Credit Agreement to Deal With Hurricane-
LAS VEGAS, NV, October 4, 2005. Pinnacle Entertainment, Inc. announced today that it has circulated to its lenders under its credit agreement a proposed amendment in order to assure that developments arising out of Hurricanes Katrina and Rita are fully contemplated under the covenants in the credit agreement. As previously reported, the two hurricanes resulted in the temporary closures of the Company's Boomtown New Orleans facility in Harvey, Louisiana (which reopened for business on September 30, 2005) and its L'Auberge du Lac facility in Lake Charles, Louisiana, and severe damage to its Casino Magic Biloxi facility in Biloxi, Mississippi. The hotel at L'Auberge du Lac is currently accommodating reconstruction workers. The Company plans to reopen the L'Auberge du Lac casino hotel as soon as such reopening is approved by governmental authorities.
The amendment, among other things, clarifies the treatment in calculating financial covenants of certain expected insurance recoveries, including business interruption insurance. Because the timing of recognition of expected business interruption insurance recoveries is uncertain, the amendment establishes procedures for recognition of business interruption insurance for purposes of the credit agreement covenants. The amendment also waives compliance with certain financial covenants for the remainder of the year, and establishes procedures for ultimately rebuilding the Biloxi facility. In addition, the proposed amendment would establish new procedures for measuring compliance with financial covenants in 2006 with respect to the Boomtown New Orleans and L'Auberge du Lac properties.
The Company is also continuing to move forward in arranging a new, larger bank deal to provide additional funding for its St. Louis and Biloxi projects.
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