Published Monday, July 26, 2010 | 8:46 a.m.
Updated Monday, July 26, 2010 | 12:23 p.m.
The property generated a profit of $17.3 million, down from $18.3 million in the year-ago quarter, as net revenue fell 2.4 percent to $186.9 million.
Boyd cited a reduction in day trip visits to Atlantic City as regional school calendars were extended to make up for school closures during severe winter storms in the first quarter.
Borgata was also hurt by regional competitors in Pennsylvania that stepped up slot machine promotions in the quarter, higher energy costs and unlucky play by the casino.
Boyd said Borgata's table game hold, or win, was 11.8 percent in the second quarter, down from 14.2 percent in the year-ago quarter.
Today's numbers were disclosed to investors as Boyd seeks financing for a Borgata subsidiary that would result in Boyd receiving a payment of about $100 million. Boyd Gaming is seeking approval from the New Jersey Casino Control Commission for the financing deal.
Bloomberg Finance reported that in the financing deal, the Borgata plans to raise $800 million through a secured note and revolving loan transaction. The $800 million would be used to repay $626.8 million outstanding under the resort’s existing credit facility, with about $149 million funding a dividend payment to the resort’s owners.
Deutsche Bank securities analyst Andrew Zarnett estimated another $25 million would cover fees and expenses for the financing transaction.
"We believe that a successful refinancing of the credit facility will allow the Borgata to extend its debt maturities beyond 2014, as well as may help extinguish its restrictive covenants to endure reduced business volumes in Atlantic City," Zarnett wrote in a research note.
Boyd didn't immediately say what it would use the $100 million for. The company hasn't said if it plans to buy out the 50 percent interest in Borgata held by longtime partner MGM Resorts International.
Boyd has the right of first refusal to buy MGM's share in the 2,000-room Borgata.
Fitch Ratings has estimated that MGM could receive $225 million to $450 million for its share of Borgata.
MGM Resorts agreed to exit the New Jersey gaming market this year to close an investigation into its ties in Macau with its partner there, Pansy Ho. New Jersey regulators assert Pansy Ho's father, Chinese gambling boss Stanley Ho, has ties to organized crime, but MGM Resorts has insisted Pansy Ho is a suitable partner.