Station Casinos LLC Announces Proposed Offering of Senior Notes

Rhea-AI Summary

Station Casinos LLC, a subsidiary of Red Rock Resorts, Inc., plans to offer $750 million in senior notes due 2032 in a private placement. The company also aims to amend its credit agreement and introduce new credit facilities to refinance existing debts and for general corporate purposes.

Insights

Financial Analyst

The announcement by Station Casinos LLC regarding the private placement of $750 million senior notes due 2032 is a significant financial maneuver, indicating a strategic approach to debt management and capital structure optimization. This move can be indicative of the company's attempt to lock in favorable interest rates ahead of potential market shifts. The involvement of senior notes, which are debt securities that take precedence over other unsecured or subordinated debt in the case of a company liquidation, reflects a commitment to secure investor confidence by offering a higher claim on assets.

Moreover, the concurrent amendment and potential refinancing of the existing credit agreement, including the establishment of a new term B loan facility and a new revolving credit facility, suggest a comprehensive restructuring of the company's debt profile. The New Term B Loan and New Revolving Credit Facility imply a diversification of the debt instruments, possibly to better match the company's cash flow patterns with its debt obligations, thus enhancing financial flexibility. The use of proceeds to refinance existing debts and for general corporate purposes will likely impact the company's interest expense and liquidity, which are critical factors for investors to monitor.

Market Research Analyst

Station Casinos LLC's announcement can be seen as a strategic initiative within the broader context of the gaming and hospitality industry. The sector often requires significant capital for operations, maintenance and expansion. The issuance of senior notes and the revamping of credit facilities may provide the company with the necessary capital to maintain competitiveness, invest in property improvements, or expand its operations. This capital injection could be a response to market demands or emerging opportunities within the industry.

However, investors should be aware of the inherent risks associated with the gaming sector, such as regulatory changes, economic downturns affecting discretionary consumer spending and increased competition. The terms and conditions of the new financing, such as interest rates and covenants, will be critical in determining the long-term impact on the company's financial health and its ability to generate shareholder value.

Legal Expert

The legal framework surrounding the private placement of the senior notes is crucial, as it involves sophisticated transactions under specific regulatory conditions. The fact that the notes are being offered pursuant to Rule 144A and Regulation S under the Securities Act of 1933 suggests that the company is targeting qualified institutional buyers and international investors, which is a common practice for companies seeking to raise capital without the burdens of public registration.

However, it is important to note that these notes will not be registered under the Securities Act and as such, they carry certain restrictions on their sale within the United States. This limitation could potentially affect the liquidity of the notes in the secondary market. Investors should consider the legal implications of such unregistered securities, including the exemption requirements and the company's compliance with applicable state securities laws.

LAS VEGAS, March 7, 2024 /PRNewswire/ -- Station Casinos LLC (the "Company"), a consolidated subsidiary of Red Rock Resorts, Inc. (NASDAQ: RRR), announced today that it intends to offer, subject to market and other conditions, $750 million aggregate principal amount of senior notes due 2032 (the "Notes") in a private placement. The notes will be guaranteed, jointly and severally, on a senior unsecured basis by each of the Company's current and future wholly-owned restricted subsidiaries that guarantees the Company's obligations under its credit agreement.

Concurrently with the issuance of the Notes, the Company expects to amend, amend and restate or refinance its Credit Agreement dated as of June 8, 2016, among the Company, the subsidiary guarantors party thereto, Deutsche Bank AG Cayman Islands Branch, as administrative agent and collateral agent, and the lenders party thereto (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Existing Credit Agreement"), to provide for, among other things, (i) a new senior secured term "B" loan facility in an aggregate principal amount of $1,320.0 million (the "New Term B Facility" and the term "B" loans funded thereunder, the "New Term B Loan"); (ii) a new senior secured revolving credit facility in an aggregate principal amount of $1,100.0 million (the "New Revolving Credit Facility" and, together with the New Term B Facility, the "New Credit Facilities"), and (iii) certain other amendments to the Existing Credit Agreement.

The Company intends to use the net proceeds of the Offering, together with the net proceeds of the New Term B Loan and $200.0 million of borrowings under the New Revolving Credit Facility, to (i) refinance all loans and commitments outstanding under the Existing Credit Agreement, (ii) pay fees and costs associated with such transactions and (iii) for general corporate purposes.

The Notes will be offered and sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in accordance with Regulation S under the Securities Act. The Notes will not be registered under the Securities Act and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities of the Company, nor shall there be any offer, solicitation or sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

FORWARD-LOOKING STATEMENTS

Statements contained in this news release that state the Company's or management's intentions, expectations or predictions of the future are forward-looking statements. Specifically, the Company cannot assure you that the proposed transactions described above will be consummated on the terms currently contemplated, if at all. Actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially is contained from time to time in the reports filed by Red Rock Resorts, Inc., the Company's parent company, with the Securities and Exchange Commission, including but not limited to Red Rock Resorts, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023. The Company and Red Rock Resorts, Inc. disclaim any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.

INVESTORS:
Stephen L. Cootey
Stephen.Cootey@redrockresorts.com
(702) 495-4214

MEDIA:
Michael J. Britt
Michael.Britt@redrockresorts.com
(702) 495-3693

View original content:https://www.prnewswire.com/news-releases/station-casinos-llc-announces-proposed-offering-of-senior-notes-302083007.html

SOURCE Red Rock Resorts, Inc.

FAQ

What is Station Casinos LLC planning to offer in a private placement?

Station Casinos LLC plans to offer $750 million aggregate principal amount of senior notes due 2032.

How does the Company intend to use the net proceeds of the Offering?

The Company intends to use the net proceeds of the Offering to refinance all loans and commitments outstanding under the Existing Credit Agreement, pay fees and costs associated with the transactions, and for general corporate purposes.

Under what conditions will the Notes be offered and sold?

The Notes will be offered and sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 and to persons outside the United States in accordance with Regulation S under the Securities Act.

Will the Notes be registered under the Securities Act?

The Notes will not be registered under the Securities Act and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

What does the press release state regarding the offer of the Notes?

The press release clarifies that it does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities of the Company, and there shall be no offer, solicitation, or sale of the Notes in any state or jurisdiction in which such actions would be unlawful.