CCM Merger Inc., the owner and operator of MotorCity Casino Hotel in downtown Detroit, is seeking to reprice its $582 million term loan, according to a person with knowledge of the transaction.
The debt due in March 2017 will pay 4.75 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Lenders on the repricing will be offered one-year soft-call protection of 101 cents, the person said, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year.
The loan was originally priced in March 2011 at 5 percentage points more than Libor, with a 2 percent floor, according to data compiled by Bloomberg.
The company’s $20 million revolving line of credit due March 2016 will continue to pay 5 percentage points more than Libor and will no longer have a minimum on the benchmark, the person said. The revolver previously had a 2 percent Libor floor, the data show. There will be a 50 basis-point fee on the unused portion of the revolver, the person said.
Bank of America Corp. is arranging the financing and will host a lender call tomorrow at 2 p.m. in New York, according to the person. Investors will have until April 13 to submit commitments and the amendment is expected to be effective on April 17.
Jacci Woods, a spokeswoman for MotorCity Casino, declined comment.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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