Boyd Gaming amends bank deal

22 December 2009

LAS VEGAS, Nevada -- Boyd Gaming Corp. announced Monday that it has amended its bank agreement to improve its financial flexibility to pursue "growth opportunities" including acquiring Station Casinos.

"While not required by our lenders, this amendment provides us with enhanced flexibility and furthers our ability to pursue potential strategic growth opportunities in the future," Boyd Gaming President and Chief Executive Officer Keith Smith said in a statement. "This amendment was done with full consideration of our recently announced proposal to acquire the assets of Station Casinos."

Smith added, however, that the offer for Station was not conditional on the changes in the bank agreement and could have proceeded without the amendment.

The gaming company announced Wednesday a $2.45 billion cash-and-debt offer for most of bankrupt competitor Station Casinos. The offer was for all 18 of Station's casinos, a majority of its land and other assets.

The new agreement will leave about $1 billion available on the company's credit facility, down from the $2 billion now available.

The company will also be allowed to work down its debt ratios at a slower pace from its current level of 7.25 times cash flow to 5.5 times cash flow by March 31, 2012.

The cash-flow ratio is a gauge of a company's liquidity, or its ability to convert assets to cash quickly. The lower a company's leverage, the easier it is for the company to raise cash from lenders, Union Gaming principal gaming analyst Bill Lerner said.

"(Liquidity is) typically a sign of (a company's) relative balance-sheet health," Lerner said. "As it turns out, it is easier to raise capital."


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