A cautious Wall Street has been taking in-depth looks at proposed multi-million bond sales with some well-known company names failing to meet the necessary requirements while others are moving along swimmingly.
Take the case of The Venetian and its parent, the Las Vegas Sands Inc., which successfully closed on an offering of $850 million in 11% interest notes. Also successful was the refinancing of a 9% senior subordinated notes valued at $200 million by Sun International Hotels Ltd. (SIH).
Trouble, however, was encountered by Donald Trump is his hopes of offering $470 million in mortgage notes. The offer was subsequently withdrawn.
Also cancelled was a $500 million bond sale last Friday by hotelier Wyndham International Inc. (WYN). Initially, the company had hoped to sell the bonds at 10.75% and resistance was felt increased the interest to 11%. Finally, the offer was withdrawn.
This week, Riviera Holding Corp. (RIV) enters the market with plans to sell $210 million in senior secured notes to refinance debt. The debt has been rated single-B-plus by Standard & Poor.
Explaining the mixed reaction to recent proposals by the gaming and lodging industry, an analyst recently wrote: Right now, the gaming and lodging refinancing has been a pretty good story with companies taking the opportunity to lock in lower rates. The difficulty with deals that haven’t gotten done is credit quality or ratings in the case of Wyndham or in the case of Trump where you have people who found the ownership problematic."
Riviera Holdings owns and operates the Riviera Hotel/Casino on the Las Vegas Strip and a gaming property in Black Hawk, Colo. On Friday, it was announced that the company had agreed to a new contract with the Culinary Union.