DBRS Finalizes Provisional Rating on Gateway’s Senior Secured 2nd-Lien Notes

DBRS has today finalized the provisional rating of B (high), with a Stable trend, on Gateway Casinos & Entertainment Limited’s (Gateway or the Company) Senior Secured 2nd-Lien Notes (the Notes). DBRS notes that proceeds from the Senior Secured Credit Facility offering were raised to $310 million from DBRS’s original assumption of $290 million and the proceeds from the Notes offering were decreased to $200 million from DBRS’s original expectation of $220 million. While this change has a slightly negative impact on the recovery prospect of the Notes, there is no impact on the RR4 recovery rating. After its review of all documentation associated with the recent offering, DBRS has confirmed that all of the remaining terms of the issuance of the Notes were consistent with those contemplated at the time the provisional rating was assigned on November 8, 2013.

The aggregate gross proceeds from the Notes totalled $200 million. The Notes mature November 26, 2020, and bear interest at a fixed annual rate of 8.5%. Use of proceeds from the Notes and the Senior Secured Credit Facility will be mainly used to repay existing indebtedness and complete a return of capital of $30 million to shareholders.

For additional information on DBRS’s view of the credit quality of Gateway, or its recent debt issuance, please refer to the DBRS report dated November 12, 2013.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Companies in the Gaming Industry and DBRS Recovery Ratings for Non-Investment Grade Corporate Issuers, which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.