December 22, 2008 / 4:53 PM / 10 years ago

Station Casinos draws remaining cash on bank line

NEW YORK, Dec 22 (Reuters) - Station Casinos said on Monday it has asked to draw down the remaining money available on its credit facility, and as of Friday $239 million of the $257 million available was funded.

The move may represent a need to hoard cash as the casino operator faces a likely restructuring of its debt load.

Station Casinos’ bondholders earlier this month refused to accept terms in a proposed debt exchange, causing the company to terminate the offer.

Worsening operating results also makes it likely the company will break terms in its bank credit agreements, analysts said.

“We see this is as a first move in what could likely be a series of moves toward a restructuring of the company’s onerous debt load,” Barbara Cappaert, analyst at KDP Investment Advisors said in a report.

“We think there is a good likelihood that Station undergoes a more substantial restructuring in or outside of bankruptcy,” she added.

Station Casinos is struggling with its debt load following a management-lead buyout last year.

“One outcome is that by drawing down on the revolver they still have the potential to negotiate a waiver and pay it back, so it could be part of that negotiation,” said Christopher Snow, analyst at CreditSights.

“If they don’t get the waiver, they have additional financing to get through any kind of restructuring that happens,” he added. “They may or may not file (for bankruptcy) coming out of this action, but it gives them the cash to prepare for either scenario.”

Reporting by Karen Brettell; Editing by Chizu Nomiyama

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