Penn National Gaming Inc. (PENN) said it has bought the debt
backed by the M Resort, an off-the-strip resort and casino near Las
Vegas, for $230.5 million.
The casino operator has been expanding its operations using its
strong cash flow. It has performed relatively well even though
reduced consumer spending has brought prolonged suffering to the
sector, Moody's Investors Service said Monday.
Penn National early this year weighed the possibility of taking
control of the Fontainebleau Las Vegas, a stalled casino hotel
development on the Las Vegas Strip.
The company said Friday it purchased the bank debt on the entity
that owns the property, as well as $160 million of subordinated
debt, from Bank of Scotland PLC, a unit of Lloyds Banking Group PLC
(LYG, LLOY.LN). The subordinated debt was formerly held by MGM
Resorts International (MGM).
The resort, on the south side of the city, opened last year just
as visitation to the area was slumping. It features 390 rooms and
more than 92,000 square feet of gambling space. The property
represents Penn National's first major investment in the Las Vegas
area.
Penn National shares closed Thursday at $30.86 and were inactive
premarket. The stock has gained 14% this year.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com