Station Casinos Completes $3.1 Billion Sale Leaseback of Four Las Vegas Casinos

Sec Edgar Database - November 7, 2007

On November 7, 2007, Station Casinos, Inc., a Nevada corporation completed its merger with FCP Acquisition Sub, a Nevada corporation, as part of transaction to take the company private.

A number of wholly owned unrestricted direct and indirect subsidiaries of the Company entered into a mortgage loan in the principal amount of $2.050 billion and related mezzanine financings in an aggregate principal amount of $425.0 million (collectively, the “CMBS Loans”), for the purpose of financing the consideration payable to the Company’s stockholders upon consummation of the Merger.

Palace Station, Boulder Station, Sunset Station and Red Rock (collectively, the “CMBS Property”) were sold to the CMBS Borrower. Immediately following such sale, such CMBS Property was leased back to the Company pursuant to a master lease with an initial term of fifteen (15) years and extension terms for an aggregate of ten (10) additional years. The Company in turn subleased each parcel of the CMBS Property back to the Operating Subsidiaries, with each such sublease having the same term as the master lease.

Interest on the CMBS Loans is equal to the LIBOR plus 2.3% per annum. In addition to paying interest on outstanding principal under the CMBS Loans, the CMBS Borrower is required to reimburse the lenders for securitization and disbursement expenses in an amount not to exceed $2,730,000.

The maturity date of the CMBS Loans shall be November 12, 2009, subject to three one-year extensions. The CMBS Loans may be prepaid in whole or in part during the initial two-year term with an initial prepayment fee equal to 1.00% of the principal amount prepaid with the prepayment fee declining after the one year anniversary of the closing date on a straightline basis to 0.0% on the two-year anniversary of the closing date. The CMBS Borrower will be required to hedge the LIBOR interest rate such that it will not exceed 5.5%.

At the commencement of each Renewal Term, if any, Base Rent shall be reset to be equal to the greater of (a) the annual Fair Market Rental for the Leased Property and (b) one hundred ten percent (110%) of the annual aggregate interest payments payable on the then-existing Landlord’s Debt. Tenant shall maintain a reserve (“FF&E Reserve”) for capital and FF&E expenditures in the amount of 2.5% of gross revenues

The CMBS Loans include $740,000,000 for Boulder Station; $1,170,000,000 for the Charleston Station;$471,000,000 for the Palace Station; and $725,000,000 for the Sunset Station. Sphere: Related Content