Horseshoe Gaming debt is rated
Wednesday, May 5, 1999 | 11:27 a.m.
Horseshoe Gaming LLC of Las Vegas, which operates riverboat casinos and hotels, said it plans to sell $600 million of bonds this week to fund its acquisition of Empress Entertainment Inc. and repay higher-interest debt.
Horseshoe, which operates casinos in Bossier City, La., and Tunica, Miss., is preparing to sell 10-year senior subordinated notes that can be called after five years. The notes are expected to yield between 8 1/2 and 8 3/4 percent, said people familiar with the sale.
Moody's Investors Service rates the notes "B2" and removed Horseshoe's ratings from review for a possible cut. The rating company said it's confident Horseshoe and Empress will be able to reduce their debts and keep their competitive positions in the gaming markets.
Standard & Poor's Corp. is still reviewing the company's "BB" rating for a downgrade, because it's concerned about the increase in Horseshoe's debt as it buys Empress.
Horseshoe said it plans to borrow $450 million to pay the cash part of its bid for Joliet, Ill.-based Empress, the largest operator of casinos in the Chicago area. Horseshoe also agreed to assume $150 million of Empress debt.
Horseshoe, currently has about $310 million in public debt. That included $150 million of 12 3/4 percent notes due 2000 and $160 million of 9 3/8 percent notes due in 2007.
The company said it plans to purchase the 12 3/4 percent notes from investors.
Donaldson, Lufkin & Jenrette Securities is arranging the note sale.
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