Up Front: WHEELER-DEALERS
DONALD DUCKS ANOTHER BULLET
DONALD TRUMP HAS SCORED another one. The New York-based developer and casino operator had $115 million in personal bank debt come due on June 30. BUSINESS WEEK has learned, though, that the banks have granted him three extra years to pay.
Say what you want, Trump is a master at giving himself breathing room. His 1990 financial meltdown savaged his personal fortune, yet he avoided bankruptcy. And now, the banks extended his personal debt maturity for fear he could not repay the entire sum, sources say. Trump insists he could have sold assets to settle the tab, which he claims is really $68 million. Afd indeed, he recently raised $280 million in a stock-and-debt offering on one of his three Atlantic City casinos, the Trump Plaza. He's using that to expand the casino and start a riverboat gaming parlor in Gary, Ind.
Whether he could have raised $115 million by selling other properties, some heavily debt-encumbered, is an open question. The Trump Plaza deal sliced some $20 million off his personal debt--but covenants required him to redeem at least $49 million in Plaza bonds. Trump depicts the debt extension as routine. He says, "I'm in better shape than in the 1980s."
Although lenders took over some of his prime assets in the early 1990s, they bet that he could stage a comeback with the rest. It's too early to tell. But he has struck a potentially lucrative deal with Hong Kong interests to build a massive residential complex on Manhattan's West Side.EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI