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Gaming Guru

Arnold M. Knightly
 

Stratosphere parent company cuts long-term debt

4 August 2009

LAS VEGAS, Nevada –- American Casino & Entertainment Properties, parent of the Stratosphere, on Monday said it cut its long-term debt load from $1.1 billion to $574 million in the second quarter, easing some stress on its financial stability.

The privately owned casino company -- which also owns both Arizona Charlie's and the Aquarius in Laughlin -- has completed a restructuring of the company's term loans, a filing with Securities and Exchange Commission shows.

Also on Monday, the company announced it is offering $375 million in new senior secured notes due 2014. The proceeds will be used to repay existing loans.

The economic benefits of the restructuring program will not be seen until the upcoming quarters. Nevertheless, American Casino trimmed its loss in the second quarter ended June 30 to $844,000 from a loss of $2.2 million during the same time last year.

The most recent loss was driven by a $10.8 million interest expense on the company's previous debt load.

The company posted a net loss of $2.2 million for the first six months of 2009, a decrease from the $5.4 million loss posted last year.

Net revenues fell 14.8 percent to $94.2 million from $110.6 million in the quarter.

Quarterly cash flow, defined as earnings before interest, taxes, depreciation and amortization, slid 16.3 percent to $20.5 million from $24.5 million.

The company is owned by Whitehall Street Real Estate Funds, a real estate investment fund affiliated with Goldman Sachs.