Management buyout at Trump dismissed

Tuesday, March 21, 2000 | 10:52 a.m.

THE ASSOCIATED PRESS

ATLANTIC CITY -- A bond analyst says Trump Hotels & Casino Resorts Inc. isn't likely to attempt going private, despite a report that insiders at the company are considering that course.

In this week's edition, Fortune Magazine reported that Trump Hotels will probably attempt to sell one of its casinos in the next six months in an effort to pay down debt. The magazine said the most likely target for sale was Trump's riverboat casino near Gary, Ind.

However, the magazine said, company officials are already discussing taking the company private if that move fails. Fortune did not cite sources.

But Tom Reeg, bond analyst at Chicago-based ABN Amro Inc., told Bloomberg News a management-led buyout or casino sale is unlikely. None of Trump's casinos could sell for enough to pay down all debt associated with the property, Reeg said, and a management-led buyout makes little financial sense.

"Any capital they have available ought to be used to invest in the business or to pay down debt," Reeg said.

Trump's $1.85 billion in long-term debt is currently rated "CCC+" by Standard & Poor's, well below investment grade status.