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Long-Term Debt | 9 Months Ended
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Sep. 30, 2022
Long-Term Debt [Abstract] |
Long-Term Debt | 5. LONG-TERM DEBT Long-term debt and the weighted average interest rates as of September 30, 2022 and December 31, 2021 consisted of the following:
Amounts in thousands |  | September 30, 2022 |  | December 31, 2021
Credit agreement - Goldman |  | $ | 348,250 |  |  | 7.71% |  | $ | — |  |  | —
Credit agreement - Macquarie |  |  | — |  |  | — |  |  | 166,600 |  |  | 6.70%
Credit agreement - CPL |  |  | — |  |  | — |  |  | 207 |  |  | 2.12%
UniCredit term loans |  |  | 4,797 |  |  | 3.12% |  |  | 6,994 |  |  | 2.55%
Financing obligation - CDR land lease |  |  | 14,229 |  |  | 15.09% |  |  | 15,378 |  |  | 11.44%
Total principal |  | $ | 367,276 |  |  | 8.12% |  | $ | 189,179 |  |  | 6.89%
Deferred financing costs |  |  | (17,510) |  |  |  |  |  | (7,695) |  |  |
Total long-term debt |  | $ | 349,766 |  |  |  |  | $ | 181,484 |  |  |
Less current portion |  |  | (5,349) |  |  |  |  |  | (3,958) |  |  |
Long-term portion |  | $ | 344,417 |  |  |  |  | $ | 177,526 |  |  |
Goldman Credit Agreement On April 1, 2022, the Company entered into a Credit Agreement (the “Goldman Credit Agreement”) by and among the Company, as borrower, the subsidiary guarantors party thereto, Goldman Sachs Bank USA, as administrative agent and collateral agent, Goldman Sachs Bank USA and BOFA Securities, Inc., as joint lead arrangers and joint bookrunners, and the Lenders and L/C Lenders party thereto. The Goldman Credit Agreement replaces the Macquarie Credit Agreement discussed below. The Goldman Credit Agreement provides for a $350.0 million term loan (the “Term Loan”) and a $30.0 million revolving credit facility (the “Revolving Facility”). As of September 30, 2022, the outstanding balance of the Term Loan was $348.3 million and the Company had $30.0 million available to borrow on the Revolving Facility. The Company used the Goldman Credit Agreement to fund the PropCo Acquisition, for the repayment of approximately $166.2 million outstanding under the Macquarie Credit Agreement, to fund the Acquisition Escrow and for related fees and expenses. The Term Loan matures on April 1, 2029, and the Revolving Facility matures on April 1, 2027. The Revolving Facility includes up to $10.0 million available for the issuance of letters of credit. The Term Loan requires scheduled quarterly payments of $875,000 equal to 0.25% of the original aggregate principal amount of the Term Loan, with the balance due at maturity. Borrowings under the Goldman Credit Agreement bear interest at a rate equal to, at the Company’s option, either (a) the Adjusted Term SOFR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “SOFR Loan”) or (b) the ABR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “ABR Loan”). The applicable margin for the Term Loan is 6.00% per annum with respect to SOFR Loans and 5.00% per annum with respect to ABR Loans. The applicable margin for loans under the Revolving Facility (“Revolving Loans”) is (1) so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Goldman Credit Agreement) of the Company is greater than 2.75 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 5.25% per annum, and for Revolving Loans that are ABR Loans will be 4.25% per annum; (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 but greater than 2.25 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 5.00% per annum, and for Revolving Loans that are ABR Loans will be 4.00% per annum; and (3) so long as the Consolidated First Lien Net Leverage Ratio of the Company is less than or equal to 2.25 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 4.75% per annum, and for Revolving Loans that are ABR Loans will be 3.75% 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 at a per annum rate 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 fees equal to the applicable margin then in effect for SOFR Loans that are Revolving Loans multiplied by the average daily maximum aggregate 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. Fees related to the Goldman Credit Agreement of less than $0.1 million and $0.1 million were recorded as interest expense in the consolidated statements of earnings for the three and nine months ended September 30, 2022, respectively. The Goldman 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 • 50% of the Company’s annual Excess Cash Flow (as defined in the Goldman Credit Agreement) (which percentage will be reduced to 25% if the Consolidated First Lien Net Leverage Ratio is greater than 2.25 to 1.00 but less than or equal to 2.75 to 1.00, and to 0% if the Consolidated First Lien Net Leverage Ratio is less than or equal to 2.25 to 1.00); and • 100% of the funds in the Acquisition Escrow if the OpCo Acquisition does not occur. The Goldman Credit Agreement provides that the Term Loan may be prepaid, subject to a prepayment premium in an amount equal to 1.00% of the principal amount of the Term Loan if such event occurs on or before April 1, 2023. This premium does not apply if there is a mandatory prepayment with respect to the Acquisition Escrow. The borrowings under the Goldman Credit Agreement are guaranteed by the material subsidiaries of the Company, subject to certain exceptions (including the exclusion of the Company’s non-domestic subsidiaries), 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 Goldman Credit Agreement contains customary representations and warranties, affirmative, negative and financial covenants, and events of default. All future borrowings under the Goldman Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties. The Company was in compliance with all applicable financial covenants under the Goldman Credit Agreement as of September 30, 2022. Deferred financing costs consist of the Company’s costs related to financings. The Company recognized $18.9 million in deferred financing costs related to the Goldman Credit Agreement for the nine months ended September 30, 2022. Amortization expenses relating to the Goldman Credit Agreement were $0.7 million and $1.3 million for the three and nine months ended September 30, 2022, respectively. These costs are included in interest expense in the condensed consolidated statement of earnings for the three and nine months ended September 30, 2022. ‎ Credit Agreement – Macquarie Capital In December 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”). The Macquarie Credit Agreement replaced the Company’s credit agreement with the Bank of Montreal (the “BMO Credit Agreement”). The Macquarie Credit Agreement provided for a $170.0 million term loan (the “Macquarie Term Loan”) and a $10.0 million Revolving Facility (the “Macquarie Revolving Facility”). The Macquarie Revolving Facility included up to $5.0 million available for the issuance of letters of credit. The Company used proceeds from the Macquarie Term Loan to fund the acquisition of MTR, CCG and CCV (the “Acquired Casinos”), for the repayment of approximately $52.0 million outstanding under the BMO Credit Agreement and for general working capital and corporate purposes. In connection with the Goldman Credit Agreement, the Macquarie Term Loan was repaid on April 1, 2022 and the Macquarie Credit Agreement was terminated. Commitment fees related to the Macquarie Revolving Facility of less than $0.1 million were recorded as interest expense in the condensed consolidated statements of earnings for the nine months ended September 30, 2022 and for each of the three and nine months ended September 30, 2021. The Company amortized $0.4 million for the nine months ended September 30, 2022 and $0.4 million and $1.2 million for each of the three and nine months ended September 30, 2021, respectively, relating to Macquarie Credit Agreement deferred financing costs. These costs are included in interest expense in the condensed consolidated statements of earnings for the three and nine months ended September 30, 2022 and 2021. The Company wrote off approximately $7.3 million of deferred financing costs to interest expense in the second quarter of 2022 in connection with the prepayment of the Macquarie Term Loan. Casinos Poland CPL’s PLN 3.0 million term loan and PLN 4.0 million term loan with mBank were paid in full in November 2021. The term loans bore an interest rate of 1-month Warsaw Interbank Offered Rate (“WIBOR”) plus 1.70%. CPL’s PLN 2.5 million term loan with mBank was paid in full in September 2022. The term loan bore an interest rate of 1-month WIBOR plus 1.90%. CPL’s PLN 10.0 million short-term line of credit was amended on April 22, 2022, and the PLN 2.5 million that was available for cash borrowing was removed from the line of credit. As of September 30, 2022, CPL 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 bearing an interest rate of overnight WIBOR plus 2.00%. As of September 30, 2022, the credit facility had no outstanding balance and PLN 5.0 million ($1.0 million based on the exchange rate in effect on September 30, 2022) 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 line of credit was amended in April 2022 extending the line of credit through April 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 ($0.7 million based on the exchange rate in effect on September 30, 2022). The mBank guarantees are secured by land owned by CPL in Kolbaskowo, Poland as well as a deposit of PLN 1.2 million ($0.2 million based on the exchange rate in effect on September 30, 2022) 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 0.6 million ($0.1 million based on the exchange rate in effect on September 30, 2022) in deposits for this purpose as of September 30, 2022. These deposits are included in deposits and other on the Company’s condensed consolidated balance sheets. Century Resorts Management As of September 30, 2022, 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 Century Casino Bath, a casino in Bath, England that the Company closed in March 2020. In November 2021, the Company amended the UniCredit Term Loan 1 to convert it into a USD term loan beginning December 31, 2021. The term loan matures September 30, 2023 and bears interest at LIBOR plus 1.625%. If LIBOR is not available, the interest rate will be determined based on a quoted rate from leading banks in the London interbank market. As of September 30, 2022, the amount outstanding on UniCredit Term Loan 1 was $0.5 million. 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, 2022, the amount outstanding was EUR 4.3 million ($4.3 million based on the exchange rate in effect on September 30, 2022) 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, 2022, the outstanding balance on the financing obligation was CAD 19.5 million ($14.2 million based on the exchange rate in effect on September 30, 2022). As of September 30, 2022, scheduled maturities related to long-term debt were as follows:
Amounts in thousands |  | Goldman Credit Agreement |  | UniCredit Term Loans |  | Century Downs ‎Land Lease |  | Total
2022 |  | $ | 875 |  | $ | 464 |  | $ | — |  | $ | 1,339
2023 |  |  | 3,500 |  |  | 1,713 |  |  | — |  |  | 5,213
2024 |  |  | 3,500 |  |  | 1,310 |  |  | — |  |  | 4,810
2025 |  |  | 3,500 |  |  | 1,310 |  |  | — |  |  | 4,810
2026 |  |  | 3,500 |  |  | — |  |  | — |  |  | 3,500
Thereafter |  |  | 333,375 |  |  | — |  |  | 14,229 |  |  | 347,604
Total |  | $ | 348,250 |  | $ | 4,797 |  | $ | 14,229 |  | $ | 367,276

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