RENO, Nev., March 1 /PRNewswire-FirstCall/ -- Monarch Casino & Resort,
Inc. (Nasdaq: MCRI) (the "Company") today announced it has refinanced its
reducing revolving term loan credit facility (the "Credit Facility") that was
scheduled to mature on June 30, 2004.
The new Credit Facility of $50 million, which includes a $46 million
payoff for the unpaid balance, replaces the original $80 million loan. The
amount of the new credit Facility may be increased by up to $30 million on a
one-time basis if requested by the Company before the second anniversary of
the closing date. At the Company's option, borrowings under the Credit
Facility can accrue interest at the agent bank's base rate (the "Base Rate")
or at the London Interbank Offered Rate ("LIBOR") for one, two, three or six
month periods. The rate of interest paid by the Company will include a margin
added to either the Base Rate or to LIBOR that is tied to the Company's ratio
of funded debt to EBITDA (1) (the "Leverage Ratio"). Depending on the
Company's Leverage Ratio, this margin can vary between 0.25 percent and
1.25 percent above the Base Rate, and between 1.50 percent and 2.50 percent
above LIBOR.
The Company may utilize proceeds from the new Credit Facility for working
capital needs and general corporate purposes relating to the Company's
Atlantis Casino Resort and for ongoing capital expenditure requirements at the
Atlantis.
The Credit Facility is secured by liens on substantially all of the real
and personal property of the Atlantis, and is guaranteed by Monarch. The
Credit Facility contains covenants customary and typical for a facility of
this nature, including, but not limited to, covenants requiring the
preservation and maintenance of the Company's assets and covenants restricting
the Company's ability to merge, transfer ownership of Monarch, incur
additional indebtedness, encumber assets, and make certain investments. The
Credit Facility also contains covenants requiring the Company to maintain
certain financial ratios, and provisions restricting transfers between Monarch
and its affiliates. The Credit Facility also contains provisions requiring
the achievement of certain financial ratios before the Company can repurchase
its common stock or pay or declare dividends.
The maturity date of the new Credit Facility is February 23, 2009.
Beginning June 30, 2004, the maximum principal borrowable under the Credit
Facility is reduced in equal increments of $1.625 million per quarter with the
remaining balance due at the maturity date. The Company may prepay borrowings
under the Credit Facility without penalty (subject to certain charges
applicable to the prepayment of LIBOR borrowings prior to the end of the
applicable interest period). Amounts prepaid under the Credit Facility may be
reborrowed so long as the total borrowings outstanding do not exceed the
maximum principal available. The Company may also permanently reduce the
maximum principal available under the Credit Facility at any time so long as
the amount of such reduction is at least $500 thousand and a multiple of
$50 thousand.
The Company paid various fees and other loan costs upon the closing of the
refinancing of the Credit Facility that are being amortized over the term of
the Credit Facility using the straight-line method, which approximates the
effective interest rate method. Management does not consider the covenants to
restrict the Company's operations.
BACKGROUND
At origination in 1997, the Company had an $80 million reducing revolving
term loan credit facility with a consortium of banks. Prior to the just
completed refinancing, the Credit Facility was also guaranteed individually by
John Farahi, Co-Chairman of the Board, Chief Executive Officer and Chief
Operating Officer of Monarch and General Manager of the Atlantis; Bahram (Bob)
Farahi, Co-Chairman of the Board and President of Monarch; and Behrouz Ben
Farahi, Co-Chairman of the Board, Chief Financial Officer, Secretary and
Treasurer of Monarch. These individuals did not provide any personal
guarantees for the just completed refinancing of the Credit Facility.
Monarch, through its wholly-owned subsidiary, owns and operates the
tropically-themed Atlantis Casino Resort in Reno, Nevada. The Atlantis is the
closest hotel-casino to, and is directly across the street from, the Reno-
Sparks Convention Center, which completed a $105 million expansion and
renovation in August 2002. The Atlantis is recognizable due to its Sky
Terrace, a unique structure rising approximately 55 feet from street level and
spanning 160 feet across the street with no intermediate support pillars. The
Sky Terrace connects the Atlantis to a 16-acre parcel of land owned by the
Company that is compliant with all casino zoning requirements, and is suitable
and available for future expansion of the Atlantis facilities, and is
currently being used by the Company as additional paved parking for the
Atlantis. The existing Atlantis site offers almost 1,000 guest rooms in three
contiguous high-rise hotel towers and a motor lodge while featuring
approximately 51,000 square feet of high-energy casino space with 37 table
games and approximately 1,450 slot and video poker machines, a sports book,
Keno and a poker room, and a variety of dining choices in the form of nine
high-quality food outlets.
This press release may contain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 which are
subject to change, including, but not limited to, comments relating to the
refinancing of its Credit Facility. The actual results may differ materially
from those described in any forward-looking statements. Additional
information concerning potential factors that could affect the Company's
financial results are included in the Company's Securities and Exchange
Commission filings, which are available on the Company's web site.
For additional information including artist renditions and photographs,
visit Monarch's web site at monarchcasino.com.
(1) "EBITDA" consists of net income plus provision for income taxes, other
expenses (income), and depreciation and amortization. EBITDA should
not be construed as an alternative to operating income (as determined
in accordance with generally accepted accounting principles) as an
indicator of the Company's operating performance, or as an alternative
to cash flows from operating activities (as determined in accordance
with generally accepted accounting principles) as a measure of
liquidity. This item enables comparison of the Company's performance
with the performance of other companies that report EBITDA, although
some companies do not calculate this measure in the same manner and
therefore, the measure as presented, may not be comparable to
similarly titled measures presented by other companies.
SOURCE Monarch Casino & Resort, Inc.
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Related links:
http://www.monarchcasino.com
CONTACT:
Ben Farahi, +1-775-825-3355,
benfarahi@monarchcasino.com, or Karl G. Brokmann,
+1-775-825-3355, kbrokmann@monarchcasino.com, both of Monarch
Casino & Resort, Inc.
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