Majestic Star gets $109.2 million loan in exchange for 12½%/14½% notes

By Angela McDaniels

Tacoma, Wash., May 29 – Majestic Star Casino, LLC said holders tendered $109.2 million principal amount of 12½%/14½% second-lien senior secured notes due 2016 in exchange for participation in a 12½%/14½% first-lien secured term loan.

The amount of notes tendered represents 98.3% of the $111,105,171 outstanding principal amount.

The offer ended at 11:59 p.m. ET on May 28, and settlement occurred May 29.

Holders had to tender $1,000 principal amount of notes to fund each $1,000 principal amount of commitment.

The company also paid accrued interest up to but excluding the settlement date.

Noteholders who made commitments to become lenders in the new term loan consented to proposed amendments to the note indenture and to the intercreditor agreement that, among other things, eliminated most of the restrictive covenants and some events of default in the indenture, released all of the liens on the collateral securing the notes under the indenture and increased the amount of permitted obligations set forth in the intercreditor agreement.

All accrued interest on the notes that remains outstanding, including accrued interest up to and including the closing date and all future interest, will be paid in kind to the extent set forth in the intercreditor agreement. Accordingly, the holders of notes that remain outstanding following the closing date will receive their next interest payment via an in-kind payment on or about June 1.

The offer was conditioned on obtaining the participation of holders of at least 95% of the outstanding notes, the receipt of the required consents to approve the proposed amendments from holders of least 95% of the outstanding notes, the execution and delivery of the supplemental indenture and amendment to the intercreditor agreement and the receipt of approvals from gaming regulatory authorities in Indiana and Mississippi.

Epiq Systems (646 282-2500 or 866 734-9393, solicitation group, or tabulation@epiqsystems.com) was the information agent and delivery agent.

Majestic is a multi-jurisdictional gaming company.

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