In California, American casino operator Penn National Gaming Incorporated has received approximately $274 million from the Jamul Indian Village Of California after an affiliate of the tribe refinanced some of the $460 million debt tied to the development of the new Hollywood Casino Jamul San Diego.
Wyomissing-based Penn National Gaming Incorporated revealed that it has provided the federally-recognized tribe with around $331 million in financing for the San Diego County casino since 2012 and it now intends to utilize the repaid funds to reduce borrowings under its credit facilities.
“We are proud to have funded the construction and opening of the Hollywood Casino Jamul San Diego and to support the Jamul Indian Village Of California in securing a post-opening financing facility that, combined with the casino operations, will help the tribe realize its goal of becoming economically self-sufficient,” said Timothy Wilmott, President and Chief Executive Officer for Penn National Gaming Incorporated. “The financing package we are announcing today reflects Penn National Gaming Incorporated’s continued focus on actively and conservatively managing our capital structure to provide the financial flexibility to support our near and long-term growth initiatives.”
Penn National Gaming Incorporated, which operates 26 facilities in 16 jurisdictions including the states of Florida, Illinois, Mississippi, Missouri, Nevada and New Jersey, explained that it is continuing to provide a portion of the financing for the Hollywood Casino Jamul San Diego including loans due in 2022 worth $123 million. It declared that it additionally agreed to fund $5 million of subordinated debt to cover incremental project costs.
“We intend to use the approximately $274 million of proceeds we are receiving to reduce borrowings under our credit facilities and further strengthen our liquidity position,” said Wilmott. “Pro forma for the recent debt repayments, our total gross leverage ratio at September 30 declined to approximately 5.76x. Furthermore, with the addition of fees resulting from the Hollywood Casino Jamul San Diego management and licensing agreements to our existing operating base and our other recently announced accretive transactions, Penn National Gaming Incorporated has further diversified our free cash flow mix, allowing us to continue to reduce leverage and maintain high levels of liquidity.”