High-yield New York casino deal set to price after hiring purchaser's counsel

A $561 million unrated bond deal for an upstate New York casino that was delayed to give investors time to bring in purchaser's counsel is now set to price next week with new bondholder-friendly terms.

After delaying the original pricing date of Aug. 27, the issuer has brought on Norton Rose Fulbright US LLP to serve as purchaser's counsel, a move aimed at boosting investor interest.

KeyBanc Capital Markets is the underwriter. The pricing is set for Thursday, Sept. 11, the firm said.

"Given the high visibility of the offering materials and the investor engagement and feedback we have received on the roadshow, we are expecting a lot of interest in the offering next week," said Geoff Urbina, managing director, KeyBanc Capital Markets Public Finance in an email.

The Aug. 13 offering documents have been twice "stickered" with hundreds of pages of updates, including a Sept. 2 second supplement that outlines the changes required by the investor's legal team.

"Norton Rose Fulbright proposed various changes to clarify the prospective bondholders' collateral and strengthen their remedies," the second supplement, dated Sept. 2, said, adding that "substantially all the changes" were made.

"Prospective purchasers of the [bonds] also provided certain feedback and requests, many of which are reflected in this second supplement, including but not limited to amortization of the [bonds]."

Norton Rose Fulbright did not respond to requests for comment by press time.

The hiring of purchaser's counsel is seen as a way to ease acceptance of a high-yield deal in the market, and is more common when market conditions favor buyers over sellers.

High-yield munis underperformed in August, seeing gains of 0.53% for the months but overall remain in the red for the year at -1.31% through month end. Inflows for August topped $2 billion, but most of that came from an asset allocation shift into a single HY ETF.

The bonds will be issued through the Sullivan County Resort Facilities Local Development Corporation. Proceeds will fund the purchase of the non-gambling businesses at Genting Group's Resorts World Catskills in Sullivan County, New York. The property, 90 miles from Manhattan, includes a pair of hotels, a golf course, spa, multiple restaurants and event space.  

The debt is backed by non-gaming revenues from the property, including hotel rates and golf-course fees. The final maturity is 2040.

Harris Beach Murtha Cullina PLLC is bond counsel. Greenberg Traurig LLP is underwriter's counsel. Munistat Services, Inc. is the issuer's financial advisor.

Jessica Lerner contributed to this report.