Gateway Casinos close $1.25bn in debt refinancing
The senior secured term loan B has been raised to clear the company’s corporate debt.
Tony Santo, Gateway’s chief executive officer, said: “Gateway is a unique gaming and entertainment company that since reopening in British Columbia and Ontario following an extended period of closure due to the Covid-19 pandemic, has generated higher property-level operating margins and adjusted EBITDA than expected.”
The funds will be utilized to refinance the organization’s capital structure while simultaneously being used to fund cash to the balance sheet. The loan is managed by affiliates of Fortress Investment Group, who are the lead investors in the transaction.
“We appreciate the support of our new lenders as the refinancing of our entire capital structure, and the repayment of the full amount that was outstanding on our LEEFF loan facility, has positioned the company with the financial flexibility to continue delivering excellent customer experiences in gaming, food and beverage and entertainment at our properties, restarting our development projects and driving performance that can continue to support further deleveraging of our capital structure,” added Santo.
Specifically, net proceeds from this transaction have been used to refinance all of the company’s corporate debt under both the Gateway Casinos & Entertainment and GTWY Holdings names.
Gabriel de Alba, executive chairman of Gateway, commented: “We are very pleased to have completed this significant refinancing with Fortress as the lead investor. As Gateway re-opened its operations in the third quarter, the company’s focus on operational discipline, including a more streamlined cost structure, and our focus on our guest experience, has led to performance that has exceeded our expectations.
“The company’s ability to move so quickly after such severe restrictions is testament to our leadership team and employees, and our focus on preserving as much liquidity as possible throughout the pandemic, including through the assistance of the Canadian government’s LEEFF program. We are grateful for the ongoing support of all our stakeholders and regulatory partners and proud to have now strengthened our capital position which will support our future growth initiatives, including online gaming opportunities.”
Gateway is one of Canada’s largest casino operators, owning 26 properties in Ontario and British Columbia, with two more in Alberta. These properties feature almost 13,000 slot machines, 365 gable games and 902 bingo seats.
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