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Joe Weinert

Atlantic City Round-Up

17 March 2003

Some 10 months after it first attempted to shop a bond deal critical to the future of Trump Marina Hotel Casino in Atlantic City, Donald Trump's casino company priced $490 million in mortgage notes.

Trump Hotels & Casino Resorts had to repeatedly sweeten the offer to entice investors concerned about the company's reputation, a possible hike in casino taxes and competitive pressures from the scheduled summer opening of Borgata Hotel Casino & Spa.

Trump Hotels sold $425 million of first-mortgage notes at a discount of 94.8 cents on the dollar and with an interest rate of 11.625 percent, giving investors a yield to maturity of 12.75 percent.

It also sold $65 million of second mortgage notes at par with an interest rate of 17.625 percent. The company will pay the first 11.625 percent of interest in cash and 6 percent in pay-in-kind notes, which typically are securities instead of cash.

"It feels terrific because the market is so brutal. I think we did a really big job. I had to step up to the plate with personal money, which you never love doing, but I did it because I have confidence in the company," Chairman and CEO Donald Trump said.

As part of the deal, Trump will buy $15 million in equity in his company and another $15 million in second mortgage notes.

The New Jersey Casino Control Commission must approve the deal before Trump Hotels can close it on March 25. The commission had given the company approval in January but said it wants to review the new, costlier terms. The agency is scheduled to consider the matter today (Monday, March 17).


Carl Icahn and his new management team at Sands Casino Hotel called a meeting with selected reporters to discuss the direction of the struggling property. The reporters left scratching their heads.

Icahn said he has no concrete plans for major capital investment, prompting a reporter to suggest that he doesn't have a vision for Sands.

"Who do you think has vision in this place? Tell me, who? You look around. I haven't seen too much vision on this whole Boardwalk. When I walk up and down this Boardwalk, tell me where this great vision is," responded Icahn, who owns 78 percent of Sands' stock.

Icahn's casino point man, Richard Brown, explained that Sands will be focusing on improving basic operations before it considers expansion. Sands has begun to replace most of the table games discarded by a previous president, is adding a bus terminal, finding synergies with Icahn's Stratosphere and Arizona Charlie's casinos in Las Vegas, and retraining and re-energizing an employee base demoralized over the past few years by repeated management changes and a bankruptcy reorganization.

"We're going to reposition the property specifically around value, specifically around service and a new marketing campaign on March 17 that really leverages the heritage of the old Sands and what the Sands used to be," said Brown, who is CEO of all four Icahn casinos.

Brown also said Sands will be unveiling its concept for a "high-energy major entertainment attraction" later this month.


The Atlantic Cityization of Park Place Entertainment continued last week with the promotion of Karlos LaSane to assistant vice president of government affairs.

LaSane is the third Atlantic City executive to move into Park Place's Las Vegas corporate headquarters since November, following CEO Wally Barr and General Counsel Bernie DeLury.

LaSane, a lifelong Atlantic City-area resident, was director of community affairs for Park Place's Atlantic City casinos. Park Place now wants him to direct his efforts toward the Nevada legislature, which is considering a broadbased corporate tax that the gaming industry favors instead of a casino-revenue tax.


Caesars Atlantic City, trying to attract a younger and hipper generation of table-games players, has opened the Party Pit.

With 34 tables on hardwood floors, casually dressed dealers and live music on stage in front of the pit, Caesars President Paul Henderson said he's trying to break the table-games mold in Atlantic City.

"This is rock'n'roll. This is what the Hard Rock's been doing for 10 years," he said. "It's like old-time Vegas."

Dealers, encouraged to break the stoic stereotype, can be seen lip-synching, twisting and having a good time with the customers as they deal.

"I go on the floor and do the moonwalk. Over here the atmosphere is, they want you to party," said Al Wright, a veteran Caesars dealer.


New Jersey Gov. James McGreevey nominated Ralph Frulio to join the five-member Casino Control Commission, which has been short a member for almost one year.

If confirmed next month, Frulio, 57, would become the first commission staffer to become a commissioner. He joined the commission as an inspector shortly before the first casino opened in 1978. He rose to the level of principal inspector before retiring at the end of 1996.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at