Gateway Casinos Closes New Credit Facility and Completes High Yield Debt Offering

On November 12, 2010, Gateway Casinos & Entertainment Limited, the second-largest casino operator in Canada and the largest casino operator in Western Canada, completed the refinancing of its US$535 million term and revolving facilities.

The refinancing included a new senior secured credit agreement providing Gateway Casinos with term and revolving facilities in the aggregate principal amount of $390 million. The credit facilities were agented by a syndicate led by Jefferies Finance LLC that included RBS Securities Inc., J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC, Morgan Stanley Senior Funding, Inc. and TD Securities.

The refinancing also included the private placement of $170 million 8.875 per cent second lien notes due 2017. The notes, denominated in Canadian dollars, were sold in the United States pursuant to Rule 144A and in Canada pursuant to applicable exemptions. The initial purchasers in the private placement were led by RBS Securities Inc. with a syndicate that included Jefferies & Company Inc., J.P. Morgan Securities Canada Inc., Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and TD Securities (USA) LLC.

Bennett Jones LLP represented Gateway Casinos with a team led by Paul Mantini and Richard Orzy that included Steven Lutz, Kevin Lynch, Jeff Heinbuch, Derek Frueh, Simon Grant, Sarah Crowe, Sean Zweig and Jennifer Hood (banking); Christian Gauthier, Peter Westcott, Bruce Hibbard, Russel Drew and Charlene Schafer (corporate and securities); Jane Helmstadter, John van Gent and Michael Kershaw (real estate); Peter Jovicic (tax); Mary Beth Currie and Jean Pierre Laporte (labour, employment and benefits) and Sarah Gilbert and Duncan McPherson (environmental). Latham & Watkins LLP acted as US counsel to Gateway with a team led by Christopher Lueking that included David Shapiro (banking/real estate) and Judah Rodgon, Max Eisenberg and Maia Nam (corporate and securities). Lawson Lundell LLP acted as British Columbia counsel with a team consisting of Edward Wilson, Paul Bradley, Mandeep Dhaliwal and Susan Do. Jack Donahue of Donahue Wells acted as regulatory counsel.

Jones Day acted as counsel to the lenders with a team consisting of Brett Barragate, Lewis Grimm and Heather Thompson. Cahill Gordon & Reindel LLP represented the initial purchasers with a team consisting of Richard Farley, Banks Bruce and Christopher Clement. Borden Ladner Gervais LLP acted as Canadian counsel to the lenders and the initial purchasers with a team consisting of Kenneth Atlas, Donald Bird, Howard Silverman, Magnus Verbrugge, Kendall Andersen, Darryl Douglas, Tai Cheng and Cherie Mah (banking); Alfred Page, Terence Lui and Shaunik Katyal (corporate and securities); Shelley Munro and Joanna Johnson (real estate); Larissa Tkachenko (tax); Sonia Mak and Peter Eastwood (labour, employment and benefits) and Deborah Overholt (environmental).

Richard Higa of McCarthy Tétrault LLP also represented The Toronto-Dominion Bank as administrative agent.