Golden Nugget owner Tilman Fertitta launches highest loan ever

Posted: April 7, 2020, 8:10 a.m.

Last update on: April 7, 2020, 10:06 a.m.

Texas billionaire Tilman Fertitta, whose empire includes the Houston Rockets of the NBA and five Golden Nugget casinos across the country, is offering a record 15% loan rate in a bid to raise vital funds during the COVID pandemic. 19.

Tilman Fertitta Golden Nugget Casinos
With the closure of its Golden Nugget casinos, Tilman Fertitta is scrambling to raise funds immediately. (Photo: Ethan Miller / Getty)

Through its holding company Landry’s Inc., Fertitta is looking for lenders to participate in a $ 250 million loan for its casinos and hundreds of restaurants, in exchange for an interest rate greater than 15%. The loan matures in 2023.

Bloomberg First reported the offer, which is facilitated by Jefferies Financial Group.

Fertitta’s casinos and hotels have temporarily shut down as non-essential businesses have been forced to shut down on orders from the governors of Nevada, Louisiana, Mississippi and New Jersey.

Along with the $ 250 million loan mobilization effort, Fertitta is donating $ 50 million of her own money to help bridge the income cutoff caused by the coronavirus. An insider said Bloomberg that Landry’s, a private company, had already secured lines of credit worth $ 300 million.

Help with professional life

Fertitta announced in March that he had been forced to lay off some 40,000 employees. Man valued at $ 4.7 billion per Forbes says the health of the business must come first, explaining, “It’s very difficult for a lot of working families, but we have to survive or there is no business.

Fertitta says if America doesn’t get back to work quickly, the result will be an economic crisis that will take years to recover. The loan offer is aimed at securing the immediate health of its casino and restaurant empire and allowing businesses to resume operations immediately once appropriate.

Bloomberg Davide Scigliuzzo and Jeannine Amodeo say of Landry’s loan offer: “Based on initial discussions with investors, the loan is offered at a spread of 14 percentage points from the benchmark rate offered by London Interbank and at a discount of about 96 cents on the dollar. . This puts the all-inclusive return above 15 percent.

The spread is the largest ever in the U.S. leveraged loan market, excluding bankrupt companies, according to data compiled by BloombergAdds the report.

The two Nevada Golden Nuggets (Las Vegas, Laughlin) are closed at least until the end of the month. Golden Nugget Atlantic City is closed indefinitely, Golden Nugget Biloxi (Mississippi) is closed until further notice, and Golden Nugget Lake Charles (Louisiana) is dark until the end of the month.

Question of survival

Fertitta and Landry did not respond to requests for comment regarding the loan. But the billionaire sat down with Texas monthly two weeks ago to disclose details of his conglomerate’s financial situation.

When asked how long his businesses could survive, Fertitta replied, “Until the end of the year. I don’t think anybody can survive past the end of the year, do they?

” It’s a question of survival. Now, paying all of my severance packages will cost almost $ 100 million through April. When you don’t have $ 10 million, $ 12 million a day, you run out of money fast. And my biggest expense is my payroll, ”added Fertitta.

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