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Long-Term Debt | 9 Months Ended
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Sep. 30, 2021
Long-Term Debt [Abstract] |
Long-Term Debt | 5. LONG-TERM DEBT Long-term debt and the weighted average interest rates as of September 30, 2021 and December 31, 2020 consisted of the following:
Amounts in thousands |  | September 30, 2021 |  | December 31, 2020
Credit agreement - Macquarie |  | $ | 167,025 |  |  | 6.69% |  | $ | 168,300 |  |  | 6.72%
Credit agreements - CPL |  |  | 546 |  |  | 2.03% |  |  | 1,296 |  |  | 2.61%
UniCredit term loans |  |  | 7,658 |  |  | 2.21% |  |  | 1,502 |  |  | 2.05%
UniCredit agreement |  |  | — |  |  | — |  |  | 7,400 |  |  | 2.60%
Financing obligation - CDR land lease |  |  | 15,302 |  |  | 13.58% |  |  | 15,313 |  |  | 13.70%
Total principal |  | $ | 190,531 |  |  | 7.04% |  | $ | 193,811 |  |  | 7.03%
Deferred financing costs |  |  | (8,086) |  |  |  |  |  | (9,261) |  |  |
Total long-term debt |  | $ | 182,445 |  |  |  |  | $ | 184,550 |  |  |
Less current portion |  |  | (4,259) |  |  |  |  |  | (10,718) |  |  |
Long-term portion |  | $ | 178,186 |  |  |  |  | $ | 173,832 |  |  |
Credit Agreement – Macquarie Capital On December 6, 2019, the Company entered into a $180.0 million credit agreement with Macquarie Capital Funding LLC, as swingline lender, administrative agent and collateral agent, Macquarie Capital (USA) Inc., as sole lead arranger and sole bookrunner, and the Lenders and L/C Lenders party thereto. The Macquarie Credit Agreement replaced the Company’s credit agreement with the Bank of Montreal (the “BMO Credit Agreement”). The Macquarie Credit Agreement provides for a $170.0 million term loan (the “Term Loan”) and the $10.0 million Revolving Facility. The Revolving Facility includes up to $5.0 million available for the issuance of letters of credit. The Company used proceeds from the Term Loan to fund the Acquisition, for the repayment of approximately $52.0 million outstanding under the BMO Credit Agreement and for general working capital and corporate purposes. In March 2020, the Company drew $9.95 million on the Revolving Facility. The Revolving Facility was repaid in July 2020 except for a $50,000 letter of credit that was repaid in May 2021. As of September 30, 2021, the outstanding balance of the Term Loan was $167.0 million and the Company had $10.0 million available to borrow on the Revolving Facility. The Term Loan matures on December 6, 2026, and the Revolving Facility matures on December 6, 2024. The Term Loan requires scheduled quarterly payments in amounts equal to 0.25% of the original aggregate principal amount of the Term Loan, with the balance due at maturity. The Term Loan may be prepaid without penalty or premium. Borrowings under the Macquarie Credit Agreement bear interest at a rate equal to, at the Company’s option, either (a) the London Interbank Offered Rate (“LIBOR”) (as defined in the Macquarie Credit Agreement), plus an applicable margin (each loan, being a “LIBOR Loan”) or (b) the Alternate Base Rate (as defined in the Macquarie Credit Agreement) (each loan, being a “ABR Loan”). The applicable margin for borrowings under the Term Loan is currently 6.50% per annum with respect to LIBOR Loans and 5.50% per annum with respect to ABR Loans. The applicable margin for borrowings under the Revolving Facility is determined as follows: (1) so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Macquarie Credit Agreement) of the Company is greater than 2.75 to 1.00, the applicable margin for LIBOR Loans will be 4.25% per annum, and for ABR Loans will be 3.25% per annum, and (2) so long as the Consolidated First Lien Net Leverage Ratio of the Company is less than or equal to 2.75 to 1.00, the applicable margin for LIBOR Loans will be 4.00% per annum, and for ABR Loans will be 3.00% per annum. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Facility a commitment fee in respect of any unused commitments under the Revolving Facility in the amount of 0.50% of the principal amount of unused commitments of such lender, subject to a stepdown to 0.375% based upon the Company’s Consolidated First Lien Net Leverage Ratio. The Company is also required to pay letter of credit participation fees equal to the applicable margin then in effect for LIBOR Loans multiplied by the average aggregate daily maximum amount available to be drawn under all letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the face amount of such letter of credit. The Company is also required to pay customary agency fees. Commitment fees of less than $0.1 million were recorded as interest expense in the condensed consolidated statements of earnings (loss) for the three and nine months ended September 30, 2021 and 2020. The Macquarie Credit Agreement requires the Company to prepay the Term Loan, subject to certain exceptions, with: 100% of the net cash proceeds of certain non-ordinary course asset sales or certain casualty events, subject to certain exceptions; and 75% of the Company’s annual Excess Cash Flow (as defined in the Macquarie Credit Agreement) if the Consolidated First Lien Net Leverage Ratio is greater than 2.75 to 1.00 (which percentage will be reduced to (i) 50% if the Consolidated First Lien Net Leverage Ratio is greater than 2.50 to 1.00 but less than or equal to 2.75 to 1.00, (ii) 25% if the Consolidated First Lien Net Leverage Ratio is greater than 2.25 to 1.00 but less than or equal to 2.50 to 1.00, and (iii) 0% if the Consolidated First Lien Net Leverage Ratio is less than or equal to 2.25 to 1.00). The borrowings under the Macquarie Credit Agreement are guaranteed by the material subsidiaries of the Company, subject to certain exceptions, and are secured by a pledge (and, with respect to real property, mortgage) of substantially all of the existing and future property and assets of the Company and the guarantors, subject to certain exceptions. The Macquarie Credit Agreement contains customary representations and warranties, affirmative, negative and financial covenants, and events of default. All future borrowings under the Macquarie Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties. The Revolving Facility includes a financial maintenance covenant (the “Financial Covenant”) tested as of the last day of each fiscal quarter in which borrowings under the Revolving Facility as of such day equal or exceed $3.5 million. Due to the COVID-19-related borrowings under the Revolving Facility in March 2020, which were substantially repaid in July 2020, the Company and the lender concluded that the Company had not been in compliance with the Financial Covenant. As of September 30, 2020, the Company and Macquarie amended the Macquarie Credit Agreement. Among other things, the amendment waived past noncompliance with the Financial Covenant, suspended further testing of the Financial Covenant until the fiscal quarter ending September 30, 2021, and suspended certain restricted payment baskets until June 30, 2021. As of September 30, 2021, the Company was in compliance with all applicable financial covenants under the Macquarie Credit Agreement. Deferred financing costs consist of the Company’s costs related to the financing of the Macquarie Credit Agreement. The Company amortized $0.4 million and $1.2 million for the three and nine months ended September 30, 2021 and 2020, respectively, relating to Macquarie Credit Agreement deferred financing costs. These costs are included in interest expense in the condensed consolidated statements of earnings (loss) for the three and nine months ended September 30, 2021 and 2020. Casinos Poland CPL’s short-term line of credit with Alior Bank ended in April 2020. The line of credit bore an interest rate of three-month Warsaw Interbank Offered Rate (“WIBOR”) plus 1.55%. As of September 30, 2021, CPL had five credit agreements with mBank as detailed below. In April 2021, CPL obtained a waiver from mBank that waives CPL’s compliance requirements with the required cash inflows and financial covenants discussed below through October 31, 2021. The first credit agreement between CPL and mBank is a PLN 3.0 million term loan that was used to renovate the existing casino space at the Marriott Hotel in Warsaw. The credit agreement bears an interest rate of 1-month WIBOR plus 1.70%. The credit agreement has a three year term through November 30, 2021. As of September 30, 2021, the credit agreement had an outstanding balance of PLN 0.5 million ($0.1 million based on the exchange rate in effect on September 30, 2021). CPL has no further borrowing availability under this credit agreement. The credit agreement is secured by a building owned by CPL in Warsaw. In addition, CPL is required to maintain both cash inflows of PLN 5.0 million to its account held with mBank and to comply with financial covenants, including covenants that relate to profit margins not lower than 0.3% to 0.4%, liquidity ratios no less than 1.3 and a debt ratio not higher than 60%. In May 2020, the credit agreement was amended to defer three months of payments to November 30, 2021. The second credit agreement between CPL and mBank is a PLN 4.0 million term loan that was used to renovate and enlarge the casino space at the Marriott Hotel in Warsaw. The credit agreement bears an interest rate of 1-month WIBOR plus 1.70%. The credit agreement has a three year term through November 30, 2021. As of September 30, 2021, the credit agreement had an outstanding balance of PLN 0.7 million ($0.2 million based on the exchange rate in effect on September 30, 2021). CPL has no further borrowing availability under this credit agreement. The credit agreement is secured by a building owned by CPL in Warsaw. In addition, CPL is required to maintain cash inflows of PLN 7.0 million to its account held with mBank and to comply with financial covenants, including covenants that relate to profit margins not lower than 0.5%, liquidity ratios no less than 0.6 and a debt ratio not higher than 70%. In May 2020, the credit agreement was amended to defer three months of payments to November 30, 2021. The third credit agreement between CPL and mBank is a PLN 2.5 million term loan that was used to purchase gaming and other equipment for the Marriott Hotel in Warsaw. The credit agreement bears interest at an interest rate of 1-month WIBOR plus 1.90%. The credit agreement has a four year term through November 30, 2022. As of September 30, 2021, the credit agreement had an outstanding balance of PLN 1.0 million ($0.3 million based on the exchange rate in effect on September 30, 2021). CPL has no further borrowing availability under this credit agreement. The credit agreement is secured by a building owned by CPL in Warsaw and a pledge of slot machines. In addition, CPL is required to maintain cash inflows of PLN 7.0 million to its account held with mBank and to comply with financial covenants, including covenants that relate to profit margins not lower than 0.5%, liquidity ratios no less than 0.6 and a debt ratio not higher than 70%. In May 2020, the credit agreement was amended to defer three months of payments to November 30, 2022. As of September 30, 2021, CPL also had a short-term line of credit with mBank used to finance current operations. The line of credit has a borrowing capacity of PLN 5.0 million. As of September 30, 2021, the credit facility had no outstanding balance and PLN 5.0 million ($1.3 million based on the exchange rate in effect on September 30, 2021) was available for additional borrowing. The credit agreement is secured by a building owned by CPL in Warsaw. The credit facility contains a number of covenants applicable to CPL, including covenants that require CPL to maintain certain liquidity and liability to asset ratios. The credit agreement was available through October 28, 2021 bearing an interest rate of overnight WIBOR plus 2.40%. On October 28, 2021, the short-term line of credit was amended to extend the availability through April 28, 2022. As of September 30, 2021, CPL had an additional short-term line of credit with mBank used to finance CPL’s current operations. The line of credit bears an interest rate of 1-month WIBOR plus 2.10% with a borrowing capacity of PLN 10.0 million ($2.5 million based on the exchange rate in effect on September 30, 2021), of which PLN 7.5 million ($1.9 million based on the exchange rate in effect on September 30, 2021) can be used only to secure bank guarantees. The credit agreement has a two year term through October 14, 2022. As of September 30, 2021, the credit facility had no outstanding balance and PLN 2.5 million ($0.6 million based on the exchange rate in effect on September 30, 2021) was available for borrowing. The credit agreement is secured by a building owned by CPL in Warsaw and a liquidity guarantee provided by Bank Gospodarstwa Krajowego for the amount of PLN 8.0 million. In addition, CPL is required to maintain cash inflows of PLN 5.0 million to its account held with mBank and to comply with financial covenants, including covenants that relate to profit margins not lower than 0.4%, liquidity ratios not less than 1.3 and a debt ratio not higher than 60%. On October 28, 2021, the PLN 7.5 million portion of the line of credit related to bank guarantees was amended to change the borrowing limit to PLN 6.5 million ($1.6 million based on the exchange rate in effect on September 30, 2021) and extend the expiration of the available line of credit for guarantees to October 27, 2023. ‎ Under Polish gaming law, CPL is required to maintain PLN 3.6 million in the form of deposits or bank guarantees for payment of casino jackpots and gaming tax obligations. mBank issued guarantees to CPL for this purpose totaling PLN 3.6 million ($0.9 million based on the exchange rate in effect on September 30, 2021). The mBank guarantees are secured by land owned by CPL in Kolbaskowo, Poland as well as a deposit of PLN 1.2 million ($0.3 million based on the exchange rate in effect on September 30, 2021) with mBank and will terminate in June 2024 and January 2026, respectively. CPL also is required to maintain deposits or provide bank guarantees for payment of additional prizes and giveaways at the casinos. The amount of these deposits varies depending on the value of the prizes. CPL maintained PLN 0.8 million ($0.2 million based on the exchange rate in effect on September 30, 2021) in deposits for this purpose as of September 30, 2021. These deposits are included in deposits and other on the Company’s condensed consolidated balance sheets. Century Resorts Management As of September 30, 2021, CRM had two credit agreements with UniCredit (the “UniCredit Term Loans”). The first credit agreement (“UniCredit Term Loan 1”) is a GBP 2.0 million term loan used for construction and fitting out of CCB. The term loan matures September 30, 2023 and bears interest at LIBOR plus 1.625%. As of September 30, 2021, the amount outstanding on UniCredit Term Loan 1 was GBP 0.8 million ($1.1 million based on the exchange rate in effect on September 30, 2021). CRM has no further borrowing availability under the loan agreement. The loan is unsecured and has no financial covenants. The second credit agreement (“UniCredit Term Loan 2”) is a EUR 6.0 million term loan converted from a $7.4 million line of credit on June 23, 2021. In August 2018, CRM entered into a loan agreement with UniCredit for a revolving line of credit to be used for acquisitions and capital expenditures at the Company’s existing operations or new operations. In March 2020, CRM borrowed $7.4 million with a 12 month term under the UniCredit Agreement. In March 2021, the term of the line of credit was extended to June 2021, when it was converted into UniCredit Term Loan 2. The term loan matures on December 31, 2025 and bears interest at a rate of 2.875%. As of September 30, 2021, the amount outstanding was EUR 5.7 million ($6.6 million based on the exchange rate in effect on September 30, 2021) and the Company had no further borrowings available. UniCredit Term Loan 2 is secured by a EUR 6.0 million guarantee by the Company and has no financial covenants. Century Downs Racetrack and Casino CDR’s land lease is a financing obligation of the Company. Prior to the Company’s acquisition of its ownership interest in CDR, CDR sold a portion of the land on which the REC project is located and then entered into an agreement to lease back a portion of the land sold. The Company accounts for the lease using the financing method by accounting for the land subject to lease as an asset and the lease payments as interest on the financing obligation. Under the land lease, CDR has four options to purchase the land. The first option date is July 1, 2023. Due to the nature of the CDR land lease financing obligation, there are no principal payments due until the Company exercises its option to purchase the land. Lease payments are applied to interest only, and any change in the outstanding balance of the financing obligation relates to foreign currency translation. As of September 30, 2021, the outstanding balance on the financing obligation was CAD 19.5 million ($15.3 million based on the exchange rate in effect on September 30, 2021). As of September 30, 2021, scheduled maturities related to long-term debt were as follows:
Amounts in thousands |  | Macquarie Credit Agreement |  | Casinos Poland ‎Credit Agreements |  | UniCredit Term Loans |  | Century Downs ‎Land Lease |  | Total
2021 |  | $ | 425 |  | $ | 338 |  | $ | 522 |  | $ | — |  | $ | 1,285
2022 |  |  | 1,700 |  |  | 208 |  |  | 2,086 |  |  | — |  |  | 3,994
2023 |  |  | 1,700 |  |  | — |  |  | 1,952 |  |  | — |  |  | 3,652
2024 |  |  | 1,700 |  |  | — |  |  | 1,549 |  |  | — |  |  | 3,249
2025 |  |  | 1,700 |  |  | — |  |  | 1,549 |  |  | — |  |  | 3,249
Thereafter |  |  | 159,800 |  |  | — |  |  | — |  |  | 15,302 |  |  | 175,102
Total |  | $ | 167,025 |  | $ | 546 |  | $ | 7,658 |  | $ | 15,302 |  | $ | 190,531

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