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Debt Holders Want Better Terms from Trump

NEW YORK – As reported by the Bloomberg News: "Donald Trump's plan to reduce $1.8 billion of debt at Trump Hotels & Casino Resorts Inc. may be delayed without the support of one group of bondholders who are demanding better terms.

"Investors owning $425 million of debt backed by assets including the Trump Marina in Atlantic City, would get 95.6 cents on the dollar under the proposed deal. The debt traded as high as 99.5 cents in recent days on optimism Trump and his partner, Credit Suisse First Boston's DLJ Merchant Banking Partners III LP, would repay the notes closer to par.

"…Trump, whose company has lost money for eight years, needs the restructuring to cut interest costs and free up more money to reinvest in his casinos. The company has fallen behind competitors in Atlantic City such as Harrah's Entertainment Inc. that have added hotel towers and expanded their properties. Also, Pennsylvania's plan to legalize slot machines will increase competition for gamblers in the region, the company said last month.

"…Some bondholders would exchange existing bonds for new debt, cash and stock. Annual interest expense would be cut by $110.2 million, Trump Hotels Vice President Scott Butera said Tuesday on a conference call. Trump's stake would drop to about 25 from 56 percent.

"A committee representing a majority of investors owning the largest part of Trump Hotels debt, or $1.3 billion of so-called Trump Atlantic City notes, agreed to the transaction, the company said…"

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