Developer says $150 million commitment should be final piece of financial puzzle for casino
Don Barden said yesterday he has secured the last piece of financing needed to complete construction of his North Shore casino.
In a statement, Mr. Barden said he and his company, PITG Gaming LLC, had received a $150 million commitment from Apollo Strategic Fund LP and a group of other lenders “which should round out our total permanent financing” for the slots parlor.
He said the total value of the permanent financing was $780 million, slightly less than the $800 million he described in a filing with the Pennsylvania Gaming Control Board last month.
At the same time, Mr. Barden, in his statement, said he was asking international lender Credit Suisse for additional time regarding a $200 million bridge loan which was due to be paid off yesterday and which was used to start the casino’s construction.
He said he was asking for more time “to complete the details of the permanent financing package and hopes to close on this financing as quickly as possible so all of the bridge lenders will be paid in full.”
Not mentioned in yesterday’s statement was $650 million in permanent financing that Mr. Barden had been negotiating with Credit Suisse for several weeks.
Bob Oltmanns, Mr. Barden’s spokesman, said he believes that financing is in place.
He said the additional time was needed on the bridge loan because Mr. Barden had yet to close on the financing. Mr. Barden had told the gaming board he had hoped to do that by yesterday.
Mr. Oltmanns said he doesn’t expect a problem getting more time from lenders.
“No one said to me, ‘We anticipate a problem with that.’ We still need to complete all of this so we can hopefully present it to the gaming control board at their next meeting,” he said.
Besides the $650 million in Credit Suisse financing, Mr. Barden had been trying to arrange another $150 million from a syndicate of banks headed by KeyBank National Association. It also was not mentioned in the statement.
To help bolster his bid for the permanent financing, Mr. Barden has pledged to sell his Fitzgeralds casino in downtown Las Vegas casino online and to set aside $35 million to make debt service payments in the first year of the Pittsburgh slots parlor’s operation if the money isn’t required for construction.
The move was done in part to offer assurances to rating agencies concerned about his ability to meet debt service payments given the heavy borrowing for the casino.
Despite Mr. Barden’s struggle to secure permanent financing, construction of the casino has continued unabated, with an anticipated opening next May. It is being built on the Ohio River shore between Carnegie Science Center and the West End Bridge.
Mr. Oltmanns said Mr. Barden’s quest to complete the financing was more than just business.
“For him what this really came down to was his reputation and his ability to live up to the commitments he made to do what he said he was going to do,” he said.
“I think the people of Pittsburgh should commit to this man based on that kind of character. He really did put his money where his mouth was.”