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With a new credit agreement, NorthStar Gaming Holdings Inc. has obtained a substantial financial boost that will fortify its financial standing and aid in its strategic expansion initiatives. With the help of Beach Point Capital Management LP, the business obtained a senior secured first lien term loan for CA$43.4 million, or roughly US$30.1 million. To guarantee the success of the transaction, Playtech Plc and its affiliates have also provided credit support.
Pending final approval from the TSX Venture Exchange, this agreement represents a critical milestone for NorthStar. The loan comes with an interest rate tied to the Secured Overnight Financing Rate (SOFR), which is set at SOFR plus 9.35%. The credit facility has a floor value for SOFR of 4.4%, and the term loans are due for repayment on January 24, 2030. Notably, the agreement includes a 30-month deferral period before payments begin, providing NorthStar with time to solidify its financial strategy.
After this deferral, the company will make quarterly payments starting at 2.5% of the principal annually for the first 42 months. Following this initial period, the annual payment rate will increase to 5% for the remainder of the term.
NorthStar has listed a number of important uses for the loan money. First, principal and interest on unsecured promissory notes that were previously obtained from Playtech will be paid back with CA$9.5 million. These notes were issued on April 25, September 13, and December 16 of 2024. To cover expenses associated with the new credit arrangement, an additional CA$7 million will be placed in an interest reserve account.
Working capital, normal business expenses, and transaction fees related to loan acquisition will be supported by the remaining cash.
NorthStar Gaming is well-positioned to strengthen its position in the cutthroat gaming market and expedite its strategic growth objectives with this new financial support.