| Item 1.01 |
Entry into a Material Definitive Agreement. |
On May 26, 2023, Golden Entertainment, Inc. (the “Company”) entered into the Second Amendment to First Lien Credit Agreement (the “Second Amendment”), by and among the Company, the subsidiary guarantors party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”). The Second Amendment amended that certain First Lien Credit Agreement, dated as of October 20, 2017, by and among the Company, the subsidiary guarantors party thereto, the lenders party thereto, the Agent, JPMorgan Chase Bank, N.A., as collateral agent, and the other parties thereto, as amended (the “Credit Facility”). The Second Amendment provides for, among other things: (1) an extension of the maturity date of the existing $240 million revolving credit facility under the Credit Facility from April 20, 2024 to the earlier of May 26, 2028 and the Springing Maturity Date (as defined below) and (2) a new senior secured term loan B-1 credit facility in the amount of $400 million with a maturity date of the earlier of May 26, 2030 and the Springing Maturity Date, which was fully drawn at closing with the proceeds thereof used to repay a portion of the Company’s existing term B loan under the Credit Facility. The “Springing Maturity Date” is defined in the Second Amendment as the earlier of the date that is 91 days prior to the stated maturity date of the Company’s 7.625% Senior Notes due 2026 and the date that is 91 days prior to the stated maturity date of the Company’s existing term loan B loan under the Credit Facility, in each case to the extent any indebtedness remains outstanding thereunder on such date.
On May 26, 2023, under the Credit Facility, after giving effect to the borrowings under the Second Amendment and the use of proceeds thereof, the Company had (1) $175 million in principal amount of outstanding term B loan borrowings, (2) $400 million in principal amount of outstanding term B-1 loan borrowings, and (3) no borrowings under the revolving credit facility. Under the Credit Facility, as amended by the Second Amendment: (a) the existing term B loan under the Credit Facility bears interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.75%), plus a margin of 2.00% or (2) the LIBOR rate for the applicable interest period (subject to a floor of 0.75%), plus a margin of 3.00%, (b) the new term B-1 loan bears interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.50%), plus a margin of 1.75% or (2) the Term SOFR rate for the applicable interest period plus a credit spread adjustment of 0.10% (subject to a floor of 0.50%), plus a margin of 2.75%, and (c) borrowings under the revolving credit facility bear interest, at the Company’s option, at either (1) a base rate determined pursuant to customary market terms (subject to a floor of 1.00%), plus a margin ranging from 1.00% to 1.50% based on the Company’s net leverage ratio, or (2) the Term SOFR rate for the applicable interest period plus a credit spread adjustment of 0.10%, plus a margin ranging from 2.00% to 2.50% based on the Company’s net leverage ratio.
The commitment fee for the revolving credit facility is payable quarterly at an annual rate of 0.375%. Borrowings under the Credit Facility are guaranteed by each of the Company’s existing and future wholly owned domestic subsidiaries (other than certain immaterial or unrestricted subsidiaries), and are secured by substantially all of the present and future assets of the Company and the