Magazine article American Banker

B of A Closes $3B Credit to Finance Deal for Nev. Gambling Properties

Magazine article American Banker

B of A Closes $3B Credit to Finance Deal for Nev. Gambling Properties

Article excerpt

Placing its biggest bet to date on the casino industry, Bank of America Corp. has closed $3 billion in bank loans to help Park Place Entertainment buy Caesars World and other gaming assets from Starwood Hotels and Resorts.

The deal by the Charlotte, N.C.-based banking company, which has dominated casino lending in recent years, is the biggest bank financing ever for a U.S. gambling company.

Analysts say the move comes at a high point for the gambling industry. Its biggest companies -- Las Vegas-based Park Place is among them -- are consolidating and creating efficiencies. And the smaller ones, which tend to focus on riverboat gambling, have improved their performance.

"You have a maturing, competitive environment," said Greg Zappin, a gaming-debt analyst for Standard & Poor's. "Companies are beginning to understand their markets and filling them out. A lot of the smaller companies are doing well."

Meanwhile, Mr. Zappin said, larger players including Park Place and Harrah's Entertainment Inc. continue to diversify and come up with new resorts that appeal to a broader range of people. For instance, Park Place on Wednesday unveiled its Paris resort in Las Vegas.

Contrary to their recent run of good luck, in the early 1990s hotel and gambling companies retrenched and went heavily into debt to rebuild. At the time, few banks were willing to loan money to such companies; one that did was San Francisco-based BankAmerica Corp. …

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