UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): July 15, 1997
AMERISTAR CASINOS, INC.
(Exact name of registrant as specified in its charter)
Nevada 0-22494 88-0304799
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation or Number)
organization)
3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
(Address of principal executive offices and Zip Code)
(702) 567-7000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
REFINANCING OF LONG-TERM DEBT. On July 24, 1997, Ameristar
Casinos, Inc. ("Ameristar") issued a press release announcing
that it has refinanced its long-term debt through a new
$125 million revolving bank credit facility (the "Revolving
Credit Facility") and the sale of $100 million aggregate
principal amount of 10-1/2% Senior Subordinated Notes due 2004
Series A (the "Senior Subordinated Notes").
The Revolving Credit Facility was entered into on July 8,
1997, pursuant to a Credit Agreement among Ameristar and its four
principal wholly owned subsidiaries (the "Borrowers"), a
syndicate of bank lenders and Wells Fargo Bank, National
Association ("WFB") as Agent Bank, Arranger and Swingline Lender.
The Borrowers made an initial draw of $114.5 million under the
Revolving Credit Facility on July 15, 1997, which was used to
repay $94.5 million in borrowings outstanding under Ameristar's
prior revolving credit facility (the "1995 Revolving Credit
Facility") and a $20.0 million short-term loan from WFB.
The Senior Subordinated Notes were issued by Ameristar at
par in a private placement to certain initial purchasers for
resale to qualified institutional buyers pursuant to the
exemption provided by Rule 144A of the Securities and Exchange
Commission. The net proceeds from the sale of the Senior
Subordinated Notes were used to repay $82.4 million in borrowings
and interest under the Revolving Credit Facility, $13.1 million
in other indebtedness and $800,000 in loan fees for the Revolving
Credit Facility. Following the application of the net proceeds
from the sale of the Senior Subordinated Notes, the outstanding
principal balance of the Revolving Credit Facility was
$32.6 million.
THE REVOLVING CREDIT FACILITY. In addition to Ameristar,
the Borrowers under the Revolving Credit Facility include:
Cactus Pete's Inc. ("CPI"), which owns and operates Cactus Petes
Resort Casino and The Horseshu Hotel & Casino, in Jackpot,
Nevada; Ameristar Casino Vicksburg, Inc. ("ACVI"), which owns and
operates Ameristar Casino Vicksburg in Vicksburg, Mississippi;
Ameristar Casino Council Bluffs, Inc. ("ACCBI"), which owns and
operates Ameristar Casino Hotel Council Bluffs, in Council
Bluffs, Iowa; and Ameristar Casino Las Vegas, Inc. ("ACLVI"),
which owns and is developing The Reserve Hotel & Casino in
Henderson, Nevada ("The Reserve").
Until Phase I of The Reserve is completed, additional draws
under the Revolving Credit Facility may be used only for the
construction of The Reserve, the acquisition of additional land
for the development of The Reserve currently under option and the
replenishment of working capital used to fund $4.0 million in
payments due in June 1997 related to the acquisition of The
Reserve and certain expenses incurred in connection with the
Revolving Credit Facility. Draws for construction of The Reserve
will be subject to the satisfaction of various conditions
typically applicable to construction loans. Following completion
of Phase I of The Reserve, Revolving Credit Facility proceeds may
be used only for working capital purposes of the Borrowers and
funding ongoing capital expenditures for existing facilities,
including construction of Phase II of The Reserve and the
acquisition of additional land under option adjacent to The
Reserve site.
Borrowings under the Revolving Credit Facility will be
designated by the Borrowers on a quarterly basis as either base
rate or London Interbank Offered Rate ("LIBOR") borrowings. The
interest rate generally will be equal to WFB's per annum prime
rate in effect from time to time or the per annum LIBOR rate,
plus in each case an applicable margin determined by reference to
the Borrowers' rolling four-quarter ratio of total funded debt to
EBITDA (as defined below). The range of the base rate margin is
from 0.25 percentage points to 2.25 percentage points, and the
range of the LIBOR margin is from 1.50 percentage points to 3.50
percentage points.
The Revolving Credit Facility will mature on June 30, 2003.
Prior to maturity, the maximum principal available under the
Revolving Credit Facility will reduce semiannually (commencing on
July 1, 1999) by an aggregate of $50.0 million in increasing
increments ranging from $2.5 million to $10.0 million. The
Borrowers may prepay any borrowings under the Revolving Credit
Facility without penalty (subject to certain charges applicable
to the prepayment of LIBOR draws prior to the end of the
applicable interest period) so long as a minimum of $10.0 million
in borrowings is repaid. The Borrowers may also optionally
reduce the maximum principal available under the Revolving Credit
Facility at any time so long as any such reduction is for a
minimum of $10.0 million. The Revolving Credit Facility includes
covenants and conditions that limit the Borrowers' outstanding
borrowings under the Revolving Credit Facility to not more than
the lesser of the Borrowers' rolling four-quarter EBITDA
multiplied by 3.25 and the Borrowers' total funded debt to not
more than the Borrowers' rolling four-quarter EBITDA multiplied
initially by 5.0, which multiplier will decline to 4.5 commencing
March 31, 1999 and to 4.0 commencing March 31, 2000. For
purposes of the Revolving Credit Facility, the Borrowers' EBITDA
is generally defined as net income before interest expense,
income taxes, depreciation and amortization, preopening costs and
certain extraordinary and non-cash items.
The Revolving Credit Facility also includes covenants
requiring the Borrowers to maintain rolling four-quarter gross
fixed charge coverage and adjusted fixed charge coverage ratios
of 1.5 to 1.0 and 1.1 to 1.0, respectively. The gross fixed
charge coverage ratio is generally defined as EBITDA divided by
the aggregate sum of interest expense actually paid and current
capitalized lease obligations plus required principal reductions
on funded debt. The adjusted fixed charge coverage ratio is
generally defined as the aggregate sum of EBITDA minus income
taxes minus distributions to stockholders (other than to another
Borrower) minus repurchases of Ameristar Common Stock divided by
the aggregate sum of interest expense actually paid and current
capitalized lease obligations plus required principal reductions
on funded, debt. For purposes of these covenants, principal
payments on the $28.7 million promissory notes issued to the
former stockholders of Gem Gaming, Inc. in connection with the
acquisition of The Reserve (the "Gem Notes") will be included
only to the extent actually paid in the applicable period. The
Revolving Credit Facility prohibits Ameristar from making any
dividend or other distribution on its capital stock during any
period in which the Borrowers' rolling four-quarter ratio of
total funded debt to EBITDA is greater than 2.0 to 1.0.
The Revolving Credit Facility is secured by liens on
substantially all of the real and personal property of the
Borrowers. The Revolving Credit Facility prohibits any future
secondary liens on these properties without the prior written
approval of the lenders. Certain changes in control of Ameristar
may constitute a default under the Revolving Credit Facility.
The Revolving Credit Facility also requires the Borrowers to
expend two percent of their consolidated revenues on capital
maintenance annually. The Revolving Credit Facility binds the
Borrowers to a number of additional affirmative and negative
covenants, including promises to maintain certain financial
ratios and tests within defined parameters.
Following the completion of Phase I of The Reserve, the
Revolving Credit Facility also provides for WFB to make certain
swingline loans to the Borrowers generally to provide short-term
financing pending the funding of a draw by the lenders under the
Revolving Credit Facility. Such swingline loans will bear
interest based on WFB's prime rate determined from time to time
in the same manner as for other borrowings under the Revolving
Credit Facility.
The Borrowers paid various fees and other loan costs upon
the closing of the Revolving Credit Facility that will be
amortized over the term of the Revolving Credit Facility. In
addition, commencing on the first anniversary of the closing of
the Revolving Credit Facility, the Borrowers will be required to
pay quarterly commitment fees at an annual rate of 0.50% (subject
to reduction to 0.375% if the Borrowers' ratio of total funded
debt to rolling four-quarter EBITDA is less than 2.00 to 1.00) of
the unused portion of the Revolving Credit Facility.
The 1995 Revolving Credit Facility was terminated early in
connection with entering into the Revolving Credit Facility. As
a result, Ameristar will incur a $1.0 million pre-tax non-cash
extraordinary charge ($637,000 or $0.03 per share on an after-tax
basis) during the 1997 third quarter to reflect the accelerated
write-off of unamortized deferred financing costs.
THE SENIOR SUBORDINATED NOTES. The Senior Subordinated
Notes were issued under an Indenture dated July 15, 1997 (the
"Indenture"), under which the Trustee is First Trust National
Association. In addition to Ameristar and the Trustee, certain
of Ameristar's subsidiaries (the "Guarantors") are parties to the
Indenture for the purpose of guaranteeing (the "Guarantees")
payments on the Senior Subordinated Notes. The Guarantors
include ACVI, ACCBI, ACLVI, A.C. Food Services, Inc. (a food
purchasing concern) and AC Hotel Corp. (which will own and
develop a 149-room hotel at Ameristar Vicksburg). ACCBI's
obligations under its Guarantee were subject to the approval of
the Iowa Racing and Gaming Commission, which was obtained on
July 24, 1997. CPI is currently a Restricted Subsidiary (as
defined) and will become a Guarantor pursuant to a Supplemental
Indenture subject to the prior approval of the Nevada Gaming
Commission, for which an application has been submitted. Future
Restricted Subsidiaries will be required to become Guarantors.
The Senior Subordinated Notes will mature on August 1, 2004.
Interest is payable semiannually on February 1 and August 1,
commencing February 1, 1998, at the per annum rate of 10.5%. The
Senior Subordinated Notes and the Guarantees are not secured and
are subordinate to all existing and future Senior Indebtedness
(as defined), which includes the Revolving Credit Facility.
Ameristar may redeem the Senior Subordinated Notes, in
whole or in part, at any time on or after August 1, 2001, at
redemption prices that decline over time from 105.25% to 101.75%.
Senior Subordinated Notes may also be redeemed if the holder or
beneficial owner thereof is required to be licensed, qualified or
found suitable under applicable Gaming Laws (as defined) and is
not so licensed, qualified or found suitable. Ameristar may also
be required to redeem a portion of the Senior Subordinated Notes
in the event of certain asset sales or the loss of a material
gaming license, and each holder of the Senior Subordinated Notes
will have the right to require Ameristar to redeem such holder's
Senior Subordinated Notes upon a Change of Control (as defined)
of Ameristar. The Senior Subordinated Notes are not subject to
any mandatory redemption or sinking fund obligations.
The Indenture includes covenants that restrict the ability
of Ameristar and the Restricted Subsidiaries from incurring
future Indebtedness (as defined); provided, however, that
Ameristar or any Guarantor may incur Indebtedness if the
incurrence thereof would not result in the Consolidated Coverage
Ratio (as defined) to be greater than 2.0 to 1.0. The
Consolidated Coverage Ratio is defined generally as the ratio of
the consolidated cash flow (measured by an EBITDA formula) to
consolidated interest and other fixed charges of Ameristar and
its Restricted Subsidiaries on a rolling four-quarter basis. The
Indenture also permits Ameristar or a Restricted Subsidiary to
incur Indebtedness without regard to the Consolidated Coverage
Ratio test in certain circumstances, including borrowings of up
to $140 million under the Revolving Credit Facility, as amended
or replaced from time to time, up to $15.0 million in recourse
FF&E financings, up to $7.5 million in borrowings for the
construction of the hotel at Ameristar Vicksburg and up to
$5.0 million of other Indebtedness.
The Indenture also includes certain covenants that, among
other things, limit the ability of Ameristar and its Restricted
Subsidiaries to pay dividends or other distributions, make
investments, repurchase subordinated obligations or capital
stock, create certain liens (except those securing Senior
Indebtedness), enter into certain transactions with affiliates,
sell assets, issue or sell subsidiary stock, create or permit
restrictions on distributions from subsidiaries or enter into
certain mergers and consolidations.
Pursuant to a Registration Rights Agreement among Ameristar,
its subsidiaries and the initial purchasers of the Senior
Subordinated Notes, Ameristar and its subsidiaries have agreed to
file by September 15, 1997, a registration statement under the
Securities Act of 1933 with respect to an offer to exchange the
Senior Subordinated Notes for debt securities with terms
identical to the Senior Subordinated Notes (except for provisions
relating to transfer restrictions, registration rights and
liquidated damages) and use their best efforts to cause the
exchange offer thereunder to be consummated by January 12, 1998.
In certain circumstances, Ameristar and its subsidiaries have
agreed to file a shelf registration statement for resales of the
Senior Subordinated Notes by the holders thereof. If the
registration obligations are not satisfied, Ameristar will be
required to pay liquidated damages to the holders of the Senior
Subordinated Notes under certain circumstances.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) Financial Statements and Pro Forma Financial
Information.
None.
(c) Exhibits.
4.1 Credit Agreement, dated as of July 8, 1997, among
Ameristar Casinos, Inc., Cactus Pete's Inc.,
Ameristar Casino Vicksburg, Inc., Ameristar Casino
Council Bluffs, Inc. and Ameristar Casino Las
Vegas, Inc., as Borrowers, the Lenders named
therein, and Wells Fargo Bank, National
Association as Arranger, Agent Bank and Swingline
Lender. See also Exhibit 99.1
4.2 Indenture, dated as of July 15, 1997, among
Ameristar Casinos, Inc., Ameristar Casino Las
Vegas, Inc., Ameristar Casino Vicksburg, Inc.,
A.C. Food Services, Inc., AC Hotel Corp.,
Ameristar Casino Council Bluffs, Inc. and First
Trust National Association.
4.3 Registration Rights Agreement, dated as of
July 15, 1997, among Ameristar Casinos, Inc.,
Ameristar Casino Council Bluffs, Inc., A.C. Food
Services, Inc., AC Hotel Corp., Ameristar Casino
Las Vegas, Inc., Ameristar Casino Vicksburg, Inc.,
Cactus Pete's, Inc., Bear, Stearns & Co. Inc., BT
Securities Corporation and First Chicago Capital
Markets, Inc.
20.1 Press Release of Ameristar Casinos, Inc. dated
July 24, 1997.
99.1 Supplemental Agreement to furnish the Securities
and Exchange Commission omitted exhibits and
schedules to Exhibit 4.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the undersigned registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
AMERISTAR CASINOS, INC.
(Registrant)
Date: July 29, 1997
By: /s/ Thomas M. Steinbauer
Thomas M. Steinbauer,
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Method of Filing
4.1 Credit Agreement, dated as of Filed electronically
July 8, 1997, among Ameristar herewith.
Casinos, Inc., Cactus Pete's
Inc., Ameristar Casino
Vicksburg, Inc., Ameristar
Casino Council Bluffs, Inc. and
Ameristar Casino Las Vegas,
Inc., as Borrowers, the Lenders
named therein, and Wells Fargo
Bank, National Association as
Arranger, Agent Bank and
Swingline Lender. See also
Exhibit 99.1
4.2 Indenture, dated as of July 15, Filed electronically
1997, among Ameristar Casinos, herewith.
Inc., Ameristar Casino Las
Vegas, Inc., Ameristar Casino
Vicksburg, Inc., A.C. Food
Services, Inc., AC Hotel Corp.,
Ameristar Casino Council
Bluffs, Inc. and First Trust
National Association.
4.3 Registration Rights Agreement, Filed electronically
dated as of July 15, 1997, herewith.
among Ameristar Casinos, Inc.,
Ameristar Casino Council
Bluffs, Inc., A.C. Food
Services, Inc., AC Hotel Corp.,
Ameristar Casino Las Vegas,
Inc., Ameristar Casino
Vicksburg, Inc., Cactus Pete's,
Inc., Bear, Stearns & Co. Inc.,
BT Securities Corporation and
First Chicago Capital Markets,
Inc.
20.1 Press Release of Ameristar Filed electronically
Casinos, Inc. dated July 24, herewith.
1997.
99.1 Supplemental Agreement to Filed electronically
furnish the Securities and herewith.
Exchange Commission omitted
exhibits and schedules to
Exhibit 4.1.