Crown Convinces the Capability to Repay Debts

Submitted by Share Trading on 5 December, 2008 - 20:26

James Packer's Crown has persuaded the banks that, it has the capability to repay the debts. It has managed to arrange a bilateral facility from 10 banks to repay the syndicated debt facility which is due on August 2010.The facility has arranged them at least 1.1 billion Australian dollars or 355 million US dollars approximately.

Crown has a current debt of about 180 million US$ and 1.6 billion US$ which is to be paid as settlement for the acquisition of Cannery in the US. However, Crown's next major refinance is due only in the year of 2012 so it does not have any block till then. It is said that the company has paid higher margins for the refinancing and has been offset by cuts in benchmark interest rates. The banks which provided the bilateral facility for Crown (CWN) are, Australia & New Zealand Banking Group, Commonwealth Bank of Australia, Barclays Capital, BNP Paribas, Citigroup, Deutsche Bank, Westpac Banking Corp, Royal Bank of Scotland, TD Securities and Bank of America but the pricing details were not disclosed. This refinancing has raised the value of share by 16 per cent or 71cent to $5.25 per share.

Chief financial officer of Crown, Geoff Kleemann, has said that “In normal markets you would start to look at these things about 12 months before they mature, but in this sort of market you just perhaps can't take that chance” and added that “the company was also keen to reassure investors and dispel any questions about its ability to refinance its debt”. Simon Milne, Crown's treasurer has said that “the completion of these loans remove refinancing risks”. The company has said that, trading to the end of November at Melbourne and Burswood in Perth will been “solid”. The analysts have said that the people were a bit negative on Crown because of their debt on MPEL business and the refinancing will surly create a positive impact on them.