SBE Can't Raise SLS Cash, Extends Escrow
One could say that the story of SLS Las Vegas is a good indicator on how Vegas fans should rate their media. One one side, there are those who trumpet the hype, ask no questions and further burnish any and all adjective laden PR doodoo squirting forth from Mount Nazarian.
On the other side... a small rag tag bunch of questioners informed by experience and arithmetic. Fortunately for us, there are other truth tellers in the world who rely on simple math and common sense - one of them being Standard & Poor.
Earlier this week, S&P quietly published a summary on Stockbridge/SBE Investment Co. LLC, holders of Sahara's neutered at garage sale bag. Their conclusion is to give the investment a negative rating, describing their business risk profile as "vulnerable" and financial risk profile as "highly leveraged."
While giving SBE credit for creating demand for their nightlife and dining destinations throughout their portfolio, S&P subtracts points for SLS/Sahara's "disadvantaged" location and a highly competitive market which isn't conducive to single property operators.
Yeah, we knew this already. But here comes the Double Bacon Whopper... S&P tells us that SBE/Stockbridge has extended escrow on J.P. Morgan's $300M loan for three more months due to their inability to secure the additional $115M of credit before the early November deadline. SBE will continue to pay interest on the escrow loan.
The release of the term loan proceeds is contingent on SLS raising $115 million in junior-priority debt with a blended cash interest rate not in excess of 6% within the next 3 months. If SLS cannot raise the additional financing, the term-loan proceeds will be returned to lenders. As a result, construction and development of the project will not begin until the junior-priority financing is raised and proceeds from the term loan are released from escrow.
The long and the short of it? Sam Nazarian better believe the fiscal cliff vanishes and Santa Claus is real.
The Latest:Neato Photos of The Park and Phone Company Arena
Can You Feel The Murrn?
PGP: MGM Charging $20 More For Bed Preferences
Wynn Files Plans For Strip Esplanade
Update: $30 To Park at Westgate
Cosmopolitan Launches Website 2.0
The Ocean's Eleven Gag You May Have Missed
Westgate Adds Parking Gates, Pay Stations
Update: It's Curtains At Wynn
MGM CEO Jim Murren Blogs About Parking
We're Doing A Thing
» Complete Archive