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Ameristar Casinos, AŞ Message Board

  • OEX52 OEX52 May 9, 2009 12:29 PM Flag

    ASCA Unsecured Senior Note

    The news that ASCA is to obtain a $500 million unsecured senior note and use a portion of the proceeds to pay down the secured revolving credit facility and the remainder for operations belies serious cash flow and asset value shortfalls. Obviously, the secured lender believes that ASCA's asset valuations indicate that the loan was not fully secured making the paydown a requirement of the easing of the debt covenants. The loan modifications already cost ASCA several millions (which ASCA capitalized rather than expensed). Also, using debt to fund operational expenses indicates that gaming, restaurant and hotel revenues are extraordinarily stressed under the current environment.