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Landry's closes on $510 million in financing

HOUSTON Landry's Restaurants Inc. said late Friday that it had closed on $510 million in new financing to help pay bondholders of $400 million who were poised to call their notes this month.

The company, parent to the Rainforest Cafe and Chart House restaurants as well as the Golden Nugget hotels and casinos, said it had closed on an offering announced earlier this month of $295.5 million in 14-percent secured notes due in 2011, as well as a previously announced $215.6 million amended and restated senior secured credit facility that included a $50 million revolving credit line and a $165.6 million term loan.

The note offering was led by Jefferies & Co. Inc., and the credit facility was arranged by Wells Fargo Foothill LLC and Jefferies Finance LLC.

Proceeds from the new notes and the credit facility were used to pay the company's former $400 million in senior notes, transaction fees and expenses, the company said in a statement.

Landry’s started in late December the cash tender offers for its $400 million in senior notes, which were due in 2014, because it needed to refinance the debt by February, according to an agreement reached with bondholders in an August 2007 court settlement. The legal battle pitted Landry's against company bondholders who demanded early payment after claiming that the late filing of Landry's 2006 annual report and its first-quarter results violated bond covenants and put the company in technical default.

Landry's agreed to settle by giving the bondholders the option to call the notes in 18 months, or February, and offered higher rates. To avoid having the holders call the bonds in February, Landry's had to refinance its debt or reach an agreement with investors for a consent payment or new interest rates.

“The strength of our company and asset base allowed us to refinance our debt amidst a very trying credit environment,” said Tilman J. Fertitta, Landry’s chairman, president and chief executive.

The note tender offer expired Feb. 13, after being extended earlier this month. The company said tenders and consents had been received on about 99.8 percent, or $394.8 million, of its outstanding 9.5 percent notes and about 82 percent, or $3.6 million, of its 7.5 percent notes.

Landry’s officials said in a statement, “As a result, the company paid a total of approximately $408 million to noteholders, including redemption premiums and accrued and unpaid interest.”

In January, Landry’s ended a pending going-private buyout with Fertitta so that it could continue to work on alternative financing to refinance its debt. The company said the deal was terminated because of a conflict with the Securities and Exchange Commission and its lenders' confidentiality agreements and disclosures.

Landry’s owns and operates 179 restaurants, entertainment venues, hotels and casinos. Its casual-dining restaurants include Saltgrass Steak House, Landry's Seafood House, Charley's Crab and other brands. It also owns the Golden Nugget Hotel & Casino in Las Vegas and Laughlin, Nev.

Contact Ron Ruggless at [email protected].

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