Subject: FNC
Poydras Gaming Finance Corp. Announces Completion of Debt Refinancing
? Improves capital structure to support ongoing cash flow priorities ?
? Provides additional capital for growth and significantly reduces Company's cost of capital ?
VANCOUVER, Dec. 28, 2017 /CNW/ - POYDRAS GAMING FINANCE CORP. (TSX-V: PYD) (OTCQX: PYDGF) ("Poydras" or the "Company"), a leading provider of gaming machines to casino operators in its core markets of Oklahoma and Texas, today announced that it has closed a one-stop financing arrangement with Prudential Capital Group ("Prudential"), the private capital investment arm of PGIM, consisting of senior and subordinated debt in the amount of US$41.0 million. The new debt facility can be broken down as follows (all amounts stated in U.S. dollars):
- Note purchase and revolving credit agreement dated December 28, 2017 (the "Senior Agreement") between the Company and its subsidiaries (the "Transaction Parties") and Prudential, consisting of $27.0 million as follows:
- a $5,000,000 senior secured revolving credit facility (the "Revolving Loan");
- a $4,000,000 delayed draw capital expenditure facility (the "Capex Note"); and
- $18,000,000 senior secured notes (the "Term Notes", and together with the Revolving Loan and Capex Note, the "Senior Loans")
- Note purchase agreement dated December 28, 2017 between the Transaction Parties and Prudential (the "Sub Agreement", and together with the Senior Agreement, the "Financing Agreement"), whereby the Company will issue $14,000,000 in senior subordinated notes (the "Subordinated Notes").
The Senior Loans are secured against all or substantially all of the assets of the Company, and any used portions will be priced at LIBOR plus 550 basis points ("bps"). Should any of the Revolving Loan or Capex Note remain undrawn, then the price will be reduced to 50bps on the unused portion. The Senior Loans will have a five year term and mature on December 28, 2022, with no mandatory amortization on the Revolving Loan and Capex Notes.
The Subordinated Notes will bear interest at 14.0% (12.0% cash interest, 2% "payment in kind"), require no principal amortization, and mature on December 28, 2023. In total, Prudential is providing $41,000,000 in committed capital to the Company with $32,000,000 funded at close. Additionally, in connection with the Subordinated Notes, Prudential will receive a pre-emptive right to purchase up to 5% of any future equity issuance at the same terms offered to other investors in the issuance.
Proceeds from the financing will be used to refinance existing indebtedness of the Transaction Parties, purchase additional gaming machines, and for general corporate purposes and strategic initiatives. The new Financing Agreement provides a cheaper all-in weighted cost of capital, reduced principal payments, and nearly $10.0 million of additional capital for continued growth.
"We're taking advantage of a healthy debt market to create a stronger capital structure for Poydras that reduces our overall borrowing costs by nearly 4% and supports our strategy for continued growth," said Peter Macy, Poydras CEO. "This new debt structure will free up cash flows for the benefit of our shareholders and provide us with new liquidity and flexibility to support our priorities for cash flow including making ongoing investments in our business. We are excited to have a new financial partner in Prudential and look forward to accelerated growth in 2018 and beyond."
About Prudential Capital Group
Prudential Capital Group is the private capital investment arm of PGIM, the $1 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU). Prudential Capital Group has been a leading provider of private placements, mezzanine debt, and equity to companies for more than 75 years. Managing a portfolio of nearly $82 billion as of September 30, 2017, Prudential Capital offers senior debt, mezzanine financing, leveraged leases, project financing, credit tenant leases, and asset financing to companies worldwide. Prudential Capital's global regional office network has locations in Atlanta, Chicago, Dallas, Frankfurt, London, Los Angeles, Milan, Minneapolis, Newark, New York, Paris, San Francisco and Sydney.* For more information, please visit prudentialcapitalgroup.com.
*Operates through PGIM (Australia) Pty Ltd.
About Poydras Gaming Finance Corp.
Poydras Gaming Finance Corp. is a regional slot route operator with approximately 2,600 gaming machines in operation across 30 casinos in Oklahoma and Texas. The Company primarily derives its revenue from short- and long-term revenue share contracts with Native American casinos. It provides gaming equipment such as slot machines and electronic table games, and project financing to owners, operators, and managers of casinos and other regulated gaming venues. The Company works with casinos, new casino developments, and gaming machine suppliers. Effective January 1, 2018, Poydras will change its name to Integrity Gaming Corp. Additional information about the Company can be found on the Company's website at www.poydrasgaming.com and on the SEDAR website at www.sedar.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this news release is considered forward-looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release, including those statements relating to expected EBITDA, and the placement of additional machines by the Company, describes the Company's expectations as of the date of this news release.
The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward-looking information include, among others, risks arising from general economic conditions and adverse industry events.
The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.
SOURCE Poydras Gaming Finance Corp.
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