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) November 6, 1998
STATION CASINOS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation)
000-21640 88-0136443
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(Commission File Number) (IRS Employer Identification No.)
2411 West Sahara Avenue
Las Vegas, Nevada 89102
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (702) 367-2411
N.A.
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
Second Amended and Restated Reducing Revolving and Term Loan Agreement
On November 6, 1998, certain subsidiaries of the Registrant
(the "SUBSIDIARIES") entered into a Second Amended and Restated Reducing
Revolving and Term Loan Agreement dated November 6, 1998 ("LOAN AGREEMENT").
A complete copy of the Loan Agreement is attached as an exhibit to this Form
8-K and is incorporated herein by reference. The following summary is
qualified in its entirety by reference to the Loan Agreement.
The Loan Agreement consists of three secured tranches. Two
revolving tranches constitute a reducing revolving credit facility (the
"Revolving Facility") which provides for borrowings up to an aggregate
principal amount of $350.0 million and the third tranche constitutes a $75.0
million term loan (the "Term Loan"). The Revolving Facility includes a swing
line facility with a sub-limit on borrowing of $15.0 million. The borrowers
under the Loan Agreement are Palace Station Hotel & Casino, Inc., Boulder
Station, Inc., Texas Station, Inc., Sunset Station, Inc., Kansas City Station
Corporation and St. Charles Riverfront Station (collectively, the
"Borrowers"). The Loan Agreement is secured by substantially all of the
assets of the Borrowers. The Registrant, Southwest Gaming Services, Inc. and
certain other subsidiaries guarantee the borrowings under the Loan Agreement
(collectively the "Guarantors"). The maturity date of the Revolving Facility
is September 30, 2003. The availability under the Revolving Facility will
reduce by $7.0 million on September 30, 1999; by $12.25 million on each of
December 31, 1999, March 31, 2000 and June 30, 2000; by $14.0 million on
September 30, 2000, December 31, 2000, March 31, 2001 and June 30, 2001; and
by $17.5 million on each fiscal quarter end thereafter. The Term Loan matures
on December 31, 2005 and amortizes in installments of $187,500 on each fiscal
quarter end from March 31, 2000 until and including December 31, 2004 and of
$17.8 million on each fiscal quarter end thereafter. Borrowings under the
Revolving Facility bear interest at a margin above the agent bank's alternate
reference rate or the Eurodollar Rate, as selected by the Registrant. The
margin above such rates, and the fee on the unfunded portions of the
Revolving Facility, will vary quarterly based on the Registrant's combined
consolidated ratio of average quarterly adjusted funded debt to Adjusted
EBITDA. As of November 25, 1998, the Borrowers' margin above the Eurodollar
Rate on borrowings under the Revolving Facility was 2.25%. The maximum margin
for Eurodollar Rate borrowings is 2.75%. The maximum margin for alternate
base rate borrowings is 1.50%. The maximum fee for the unfunded portion of
the Revolving Facility is 0.50%. The interest rate on the Term Loan is 3.25%
above the Eurodollar Rate.
The Loan Agreement contains certain financial and other
covenants. These include a maximum funded debt to Adjusted EBITDA ratio for
the Borrowers combined of 2.50 to 1.00 for each fiscal quarter, a minimum
fixed charge coverage ratio for the preceding four quarters for the Borrowers
combined of 1.40 to 1.00 until and including March 31, 1999 and for each
quarter thereafter, 1.50 to 1.00, limitations on indebtedness, limitations on
asset dispositions, limitations on investments, limitations on prepayments of
indebtedness and rent and limitations on capital expenditures. As of
September 30, 1998, the Borrowers combined funded debt to Adjusted EBITDA
ratio was 2.04 to 1.00 and their combined fixed charge coverage ratio for the
preceding four quarters ended September 30, 1998 was 1.81 to 1.00. A tranche
of the Revolving Facility contains a minimum tangible net worth requirement
for Palace Station Hotel & Casino, Inc. ("Palace Station")($10 million plus
95% of net income determined as of the end of each fiscal quarter with no
reduction for net losses) and certain restrictions on distributions of cash
from Palace Station to the Registrant. As of September 30, 1998, Palace
Station's tangible net worth exceeded the requirement by approximately $8.4
million. These covenants limit Palace Station's ability to make payments to
the Registrant, a significant source of anticipated cash for the Registrant.
In addition, the Loan Agreement has financial and other
covenants relating to the Registrant. These include a tangible net worth
covenant of $265.0 million (adjusted upward for 95% of cumulative net income
(without deduction for any net loss) and 100% of capital stock issuances by
the Registrant and downward for certain capital stock repurchases, preferred
stock dividends, or certain permissible asset dispositions, required write
down of assets and preopening expense, if any) and a consolidated funded debt
to Adjusted EBITDA ratio of no more than 5.50 to 1.00 on December 31, 1998
and reducing quarterly to 4.00 to 1.00 on September 30, 2001. Other covenants
limit prepayments of indebtedness or rent (including, subordinated debt other
than refinancings meeting certain criteria), limitations on asset
dispositions, limitation on dividends, limitations on indebtedness,
limitations on investments and limitations on capital expenditures. The Loan
Agreement also prohibits the Registrant from holding cash and cash
equivalents in excess of the sum of the amounts necessary to make the next
scheduled interest or dividend payments on the Registrant's senior
subordinated notes and preferred stock, the amounts necessary to fund casino
bankroll in the ordinary course of business any amount required to be held by
the Registrant or any restricted subsidiary by any gaming boards, and $2.0
million. The Registrant has pledged the stock of all of its subsidiaries
except Kansas City Station Corporation and St. Charles Riverfront Station and
has agreed to pledge the stock of the latter two subsidiaries upon regulatory
approval (which is expected to be obtained). The Registrant and the
Guarantors waive certain defenses and rights including rights of subrogation
and reimbursement. The Loan Agreement contains customary events of default
and remedies and is cross-defaulted to the Registrant's senior subordinated
notes and a change of control default.
2
Amendment No. 1 to Second Amended and Restated
Reducing and Revolving Term Loan Agreement
On November 30, 1998, certain subsidiaries of the
Registrant entered into an Amendment ("AMENDMENT NO. 1") to the Loan
Agreement. Amendment No. 1 amends a covenant in the Loan Agreement that
restricts borrowings based on Tangible Net Worth requirements. A complete
copy of Amendment No. 1 is attached as an exhibit to this Form 8-K and is
incorporated herein by reference. The foregoing description is qualified in
its entirety by reference to Amendment No. 1.
Second Amendment to Rights Agreement
On December 1, 1998, the Registrant and Continental Stock
Transfer & Trust Company, as rights agent, (the "Rights Agent") entered into
the Second Amendment to Right Agreement (the "Rights Amendment") amending
certain provisions of the Rights Agreement dated as of October 6, 1997
between the Registrant and the Rights Agent (the "Rights Agreement"). The
Rights Amendment provides, among other things, that the definition of
Acquiring Person, as amended by the First Amendment to Rights Agreement, is
deleted and replaced in its entirety with the definition of Acquiring Person
contained in the Rights Agreement prior to the First Amendment to Rights
Agreement. The Rights Agreement is attached hereto and is incorporated by
reference herein. The foregoing description is qualified in its entirety by
reference to the Second Amendment.
Press Release
Attached is a press release issued by the Registrant on December 4, 1998.
The press release is incorporated herein by this reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
STATION CASINOS, INC.
a Nevada corporation
By: /s/ Glenn C. Christenson
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Glenn C. Christenson
Executive Vice President and
Chief Financial Officer
Date: December 4, 1998
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EXHIBIT INDEX
Exhibit Exhibit
Number Description
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4.1 Second Amended and Restated Reducing Revolving and Term Loan
Agreement dated as of November 6, 1998 among Palace Station
Hotel & Casino, Boulder Station, Inc. Texas Station, Inc.,
St. Charles Riverfront Station, Inc., Kansas City Station
Corporation, Sunset Station, Inc., the lenders named therein,
Societe Generale, as Documentation Agent, Bank of Scotland,
as Co-Agent and Bank of America National Trust and Savings
Association, as Administrative Agent.
4.2 Amendment No. 1 dated as of November 30, 1998 to Second
Amended and Restated Reducing Revolving and Term Loan
Agreement dated as of November 6, 1998 among Palace Station
Hotel & Casino, Boulder Station, Inc. Texas Station, Inc.,
St. Charles Riverfront Station, Inc., Kansas City Station
Corporation, Sunset Station, Inc. The lenders named therein,
Societe Generale, as Documentation Agent, Bank of Scotland,
as Co-Agent and Bank of America National Trust and Savings
Association, as Administrative Agent.
4.3 Second Amendment to Rights Agreement, dated as of December 1,
1998, between Station Casinos, Inc. and Continental Stock
Transfer & Trust Company, as Rights Agent.
99.1 Press Release dated December 4, 1998
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