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Nov. 25, 2008
Copyright © Las Vegas Review-Journal

Station Casinos owners loaning company millions to weather economic storm

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL

Station Casinos' owners are putting more of their own money into the company to weather the current economic storm.

The owners are loaning the company between $450 million and $500 million, as well as conducting a debt exchange, to reduce the locals gaming company’s debt load and related interest payments, according to a Tuesday filing with the Securities and Exchange Commission.

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    • Station Casinos had $5.4 billion in long-term debt for the third-quarter ended Sept. 30, paying $281.9 million in interest payments during that nine-month period.

    The filing did not specify which of the owners — the Fertitta family or Los Angeles-based real estate firm Colony Capital — is infusing the locals gaming company with cash, stating that “entities affiliated with existing equity owners ... or institutions or persons who are investors” will provide the loan.

    Colony Capital owns 75.9 percent of the company with members of the founding family, the Fertittas, owning 24.1 percent.

    The Fertitta family, which includes company Chairman and Chief Executive Officer Frank Fertitta III, Vice Chairman Lorenzo Fertitta and sister Delise Sartini, invested $870.5 million worth of stock toward the $5.4 billion buyout, which closed in November.

    Colony Capital invested $2.6 billion in cash for its equity share.

    Other company executives and third party investors, such as Melbourne, Australia-based gaming company, Crown Ltd, have also invested cash in the company.

    Station Casinos also announced Tuesday it hopes to issue a pair of 10 percent secured term loans due in 2016, pushing the earliest maturity date back four years.

    The private exchange of up to $459 million would involve five sets of unsecured notes worth a combined $2.088 billion, with rates ranging from 6 percent to 7.75 percent.

    Some of the notes were trading as low as 8 cents on the dollar on Friday. The exchange offer is contingent on 60 percent of the old notes being tendered prior to midnight on Dec. 5.

    If 82.5 percent of the old notes are exchanged, the new ownership’s loan would take the form of unsecured, junior subordinate loans.

    The Station Casinos announcement comes a week after Harrah’s Entertainment announced it hoped to issue $2.1 billion in new 10 percent notes due 2016 and 2018 in a similar debt exchange to relieve pressure on its interest payments.

     

    Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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    X STATION PLAYER wrote on November 25, 2008 05:35 PM: Stations Casino Mgt, must be ashamed of there newest production of the Aliante, what a mess!!! I went to a few of there restraunts and ALL of em have skimpy portions, high priced, and tight machines! My Family and Friends ALL decided that they will NOT go back to any Station Casinos. When someone is willing to give you there money, you should give proper service!!!


    Smacked Around wrote on November 25, 2008 05:11 PM: I patted a waitress on the rump and she smacked me up the side of the head! Is that service, or what???



    trooperdan wrote on November 25, 2008 05:04 PM: Station Casinos big problem is not being loyal to locals who have made the company what they are today. They have monopolized the Vegas valley for last 2 decades. They have outrageous resort fees ranging from $5-$25 PER NIGHT at each hotel for amenities that should be included in room rate. They require $100 dep. Anything to screw the locals. I agree with Michelle, i loaned Stations hella money on Cleopatra Keno, time to pay up!


    Michelle wrote on November 25, 2008 04:15 PM: I loaned Stations $20 of my dollars on the Coyote Moon machine - remember it is only a loan and I expect to get that back tonight!


    Tourist gambler wrote on November 25, 2008 04:14 PM: Their personnel are not on board with their base Gambler. I put 33,000 points on my Boarding pass card in a ten day period, and the lady wouldn't take a 30 dollars hotel service fee off my account, she stated that all the points were not just from her (hotel the "Sante Fe"). I won't be back there, HELLO Fertitta. I wrote a letter to Management, and they never got back with me.