GEYSERVILLE, Calif., Aug. 4, 2016 /PRNewswire/ -- River Rock Entertainment Authority, Inc. ("River Rock"), the operator of the River Rock Casino in Sonoma County, today disclosed certain information in connection with a planned restructuring and settlement proposal to certain stakeholders regarding its 9% Series A Senior Notes due 2018 and 8% Series B Tax-Exempt Senior Notes due 2018 (the "Senior Notes").
River Rock is seeking to advance this proposal with UMB Bank, N.A., solely in its capacity as successor indenture trustee (the "Senior Notes Trustee") for the holders of the Senior Notes under that certain Indenture, dated as of December 21, 2011, by and between River Rock and the Senior Notes Trustee and the holders of the Senior Notes. River Rock is seeking a restructuring and settlement of the indebtedness evidenced by the Senior Notes which would be binding on all holders of the Senior Notes in order to resolve defaults that have existed since May 2014.
Specifically, River Rock intends to make a non-binding offer to the Senior Notes Trustee, which would include the following terms: (i) a cash payment in the aggregate amount of 30% of the principal amount of the outstanding Senior Notes for pro rata distribution to all holders of Senior Notes, and (ii) cash held in the Parity Lien Debt Account. In order to obtain financing for the settlement, River Rock will need to demonstrate that any settlement agreed to by the Senior Notes Trustee is supported by the holders of at least a majority of the principal amount of the Senior Notes. Certain institutional holders of the Senior Notes have formed a working group (the "Ad Hoc Holder Group") and such holders are currently in consultation with the Senior Notes Trustee. River Rock expects to hold a conference call on or before August 12, 2016 among River Rock, Stuyvesant Square Advisors, acting as financial advisor to River Rock, legal counsel for River Rock, the Senior Notes Trustee, legal counsel and the financial advisor to the Senior Notes Trustee, and the Ad Hoc Holder Group to discuss the matters described in this press release.
If River Rock receives a preliminary indication of interest in the non-binding offer from the Senior Notes Trustee after consultation with the Ad Hoc Holder Group, River Rock intends to proceed as follows:
- River Rock will continue its negotiations and prepare a preliminary restructuring and settlement proposal for formal consideration by the Senior Notes Trustee and holders.
- If the preliminary restructuring and settlement proposal is acceptable to the Senior Notes Trustee and Ad Hoc Holder Group, River Rock will create an investor website for all holders of Senior Notes to which it will post a definitive restructuring and settlement proposal, disclosure statement and other communications relating to the settlement. River Rock would then schedule informational calls that would be open to all holders of the Senior Notes to present its definitive restructuring and settlement proposal. RIVER ROCK WILL NOT CONDUCT A TENDER OFFER FOR ITS SENIOR NOTES.
- If there is support for a definitive restructuring and settlement proposal by both the Senior Notes Trustee and holders of the Senior Notes representing in excess of a majority of the outstanding principal amount of the Senior Notes, River Rock would request that the Senior Notes Trustee commence a trust instruction proceeding in a state court in the State of Minnesota pursuant to which the Senior Notes Trustee would request court approval to implement the restructuring and settlement proposal.
The cash proceeds to be distributed in connection with the restructuring and settlement proposal described above are expected to be made available to River Rock pursuant to a loan agreement from Benefit Street Partners LLC or an affiliate, as lender, to be entered into simultaneously with the consummation of the restructuring and settlement plan (the "Loan Agreement"). The Loan Agreement would allow a maximum borrowing of $50,000,000. Closing under the Loan Agreement would be subject to the completion of definitive documentation, satisfaction and discharge of the Senior Notes, River Rock's Senior Notes issued in 2004 and certain subordinated debt of River Rock, as well as other customary conditions to closing.
If, for any reason, River Rock is unable to consummate the Loan Agreement, River Rock would immediately terminate the offer to the holders of the Senior Notes described above.
Consummation of any restructuring or settlement of the Senior Notes is subject to many factors and uncertainties and any estimate for the timing thereof is subject to variables that are outside the control of River Rock. However, based upon input from its advisors, River Rock believes that it is possible to complete the restructuring and settlement plan described in this press release before the end of 2016 or in early 2017.
The negotiations of the terms and conditions of this proposal will continue and a definitive agreement, if any, may result in materially different terms.
About River Rock Entertainment Authority
The Authority is the operator of the River Rock Casino in Sonoma County, California, and is a tribal governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized self-governing Indian tribe.
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SOURCE River Rock Entertainment Authority, Inc.