The Majestic Star Casino, LLC Commences Invitation to Holders of Outstanding Senior Secured Notes to Become Lenders in a New Term Loan and Related Consent Solicitation

LAS VEGAS, April 30, 2015 /PRNewswire/ -- The Majestic Star Casino, LLC ("Majestic") announced today that it is inviting the holders of its 12.5% / 14.5% Second Lien Senior Secured Notes due 2016 (the "Notes") to become lenders in a new 12.5% / 14.5% First Lien Secured Term Loan Facility (the "New Term Loan"). Each holder of Notes may commit to become a lender in the New Term Loan (a "Commitment") in consideration for properly delivered and accepted outstanding Notes and consents for amendments to the indenture (the "Indenture") and the intercreditor and lien subordination agreement (the "Intercreditor Agreement") relating to the Notes.

The invitation to commit to the New Term Loan (the "Invitation") will expire at 11:59 p.m., New York City time, on May 28, 2015, unless extended by Majestic (the "Expiration Date"). Commitments received at or prior to 5:00 p.m., New York City time, on May 13, 2015, unless extended (the "Early Commitment Date") will be eligible for settlement after the Early Commitment Date and prior to the Expiration Date if Majestic exercises its early settlement right as described below. Holders who commit to the New Term Loan must deliver $1,000 aggregate principal amount of Notes to fund each $1,000 aggregate principal amount of Commitment to the New Term Loan (the "Consideration") prior to the Early Commitment Date or the Expiration Date.  Commitments in the New Term Loan will not be accepted for amounts less than $2,000. The Notes delivered (and not validly rescinded) as Consideration pursuant to a Commitment will be accepted in whole multiples of $1 above the $2,000 minimum.

Lenders in the New Term Loan will not be required to advance or lend any money to Majestic thereunder.

The following table summarizes the material terms of the Invitation:

Holders of Notes who make Commitments to become lenders in the New Term Loan will be required to consent to the proposed amendments (the "Proposed Amendments") to the Indenture and the Intercreditor Agreement, which amendments would, among other things, eliminate most of the restrictive covenants and certain events of default contained in the Indenture, release all of the liens on the collateral securing the Notes under the Indenture and increase the amount of permitted obligations set forth in the Intercreditor Agreement (the "Consent Solicitation"). By making a Commitment and delivering the related Notes as Consideration, a holder shall be deemed to have delivered its consent to the Proposed Amendments with respect to its Notes being delivered. Holders may not make Commitments to become lenders in the New Term Loan without also delivering consents and may not deliver consents without also making Commitments to become lenders in the New Term Loan.

Majestic is making the Invitation for holders to commit to become lenders under the New Term Loan upon the terms and conditions set forth in the Information Memorandum and Consent Solicitation Statement dated April 30, 2015 (the "Information Memorandum"). Holders may commit to become lenders under the New Term Loan only by following the procedures described in the Information Memorandum. It is anticipated that The Depository Trust Company ("DTC") will process the Invitation. Holders of Notes must allow sufficient time for completion of the Automated Tender Offer Program procedures during the normal business hours of DTC to deliver the Notes.

In addition to delivery of Notes through DTC by the Early Commitment Date or Expiration Date, holders will be required to deliver (which, on the applicable deadline, may be by email, followed up by originals the next morning) no later than 11:59 p.m. on the date of the Early Commitment Date or Expiration Date, as applicable, a Commitment Letter, including the Administrative Questionnaire included therewith, and an executed signature page to the credit agreement governing the New Term Loan (the "Credit Agreement").

Commitments before the Early Commitment Date may be rescinded, and the related consents therefore revoked, at any time prior to 5:00 p.m., New York City time, on May 13, 2015, unless extended (the "Commitment Rescission Deadline") by following the procedures described in the Information Memorandum. After the Commitment Rescission Deadline, Commitments made before the Early Commitment Date may not be rescinded, and the related consents may not be revoked. Commitments after the Early Commitment Date, but before the Expiration Date, may be rescinded, and the related consents therefore revoked, at any time prior to the Expiration Date.

Following the Early Commitment Date and prior to the Expiration Date, Majestic may, but is not obligated to, elect to accept the Commitments validly made at or prior to the Early Commitment Date. Notes accepted under this early settlement right shall be settled on such date or promptly thereafter by entry into the New Term Loan and the Proposed Amendments. The "Closing Date" with respect to the Invitation is the date on which Majestic settles all Commitments not previously settled on the Early Settlement Date, if any, by entering into the New Term Loan or settling additional Commitments for inclusion in the New Term Loan, as applicable. Subject to the terms and conditions of the Invitation, the Closing Date is expected to be May 29, 2015.

Holders of Notes that participate in the Invitation will receive on the Early Settlement Date or the Closing Date, as applicable, accrued and unpaid interest on the Notes up to, but not including, the Early Settlement Date (or, if Majestic does not exercise its early settlement right, the Closing Date), in cash, regardless of whether such Holders make their Commitment prior to the Early Commitment Date or after the Early Commitment Date and prior to the Expiration Date. Holders that make a valid Commitment to the New Term Loan will not be entitled to any other interest payments under the Notes.

The New Term Loan will be in an aggregate principal amount equal to the total aggregate principal amount committed in the Invitation and will be due five years after the Early Settlement Date if Majestic exercises its early settlement right (or five years after the Closing Date if Majestic does not exercise its early settlement right). The New Term Loan will bear interest at 12.5% per annum, provided that Majestic may elect, in whole or in part, to pay such accrued interest in kind at a rate equal to 14.5% per annum. Interest on the New Term Loan will be payable semi-annually.  Interest shall accrue daily on the New Term Loan from the Early Settlement Date if Majestic exercises its early settlement right (or from the Closing Date, if Majestic does not exercise its early settlement right). If Majestic exercises its early settlement right, the New Term Loan held by lenders who participated in the Invitation after the Early Commitment Date shall accrue interest retroactively from the Early Settlement Date. To the extent the Company elects to pay interest in kind, the interest in kind payment will be payable through the capitalization and addition thereof to the principal amount of the New Term Loan at the end of each interest period on each payment date. The New Term Loan will be guaranteed by all of the guarantors under the Indenture, and will have security and collateral consistent with the Indenture but on a first priority basis.

If Majestic enters into the New Term Loan and the Proposed Amendments become effective, all accrued and unpaid interest on the Notes that remain outstanding following the Closing Date, including accrued and unpaid interest up to and including the Closing Date and all future interest, will be paid in-kind to the extent set forth in the Intercreditor Agreement. Accordingly, the holders of any Notes that do not participate in the Invitation or whose Commitment is not accepted by Majestic or whose Notes are otherwise left outstanding following the Closing Date will receive their next interest payment via a payment-in-kind, regardless of whether the Invitation is extended. We will not make any interest payments on the Notes until the Invitation expires or we terminate the Invitation.

The Invitation and Consent Solicitation are subject to the satisfaction or waiver of certain conditions, including, among others, (i) the participation by holders owning at least 95% of the aggregate principal amount of the outstanding Notes (and that such Notes were validly delivered and the related Commitment not rescinded), (ii) the receipt of the requisite consents to approve the applicable Proposed Amendments from holders owning at least 95% of the aggregate principal amount of the outstanding Notes, (iii) the execution and delivery of the Supplemental Indenture and amendment to the Intercreditor Agreement giving effect to such Proposed Amendments and (iv) the receipt of approvals from gaming regulatory authorities in Indiana and Mississippi for the consummation of the transaction contemplated by the Information Memorandum. Further details about the terms and conditions of the Invitation and Consent Solicitation are set forth in the Information Memorandum.

Questions and requests for assistance, for copies of the Credit Agreement or for additional copies of the Invitation and Consent Solicitation documents may be directed to the Information Agent at its telephone number and email address listed below.

Majestic has retained Epiq Systems to act as Information Agent and Delivery Agent in connection with the Invitation and Consent Solicitation, and holders can contact them at (646) 282-2500 or toll free at (866) 734-9393 (ask for the Solicitation Group) or by email at [email protected] with a reference to "Majestic" in the subject line.

The Information Memorandum and the other documents relating to the Invitation and Consent Solicitation are expected to be distributed to holders beginning today. Holders are urged to read the Information Memorandum and the other materials carefully when they become available.

This release is for informational purposes only and is neither an offer to buy or sell nor a solicitation of an offer to buy or sell any securities of Majestic or any of its subsidiaries or parent entities. The Invitation and Consent Solicitation are only being made pursuant to the Information Memorandum and related documents.

About The Majestic Star Casino, LLC

The Majestic Star Casino, LLC, is a multi-jurisdictional gaming company that owns and operates: two adjacent dockside gaming facilities (Majestic Star and Majestic Star II) and a hotel located in Gary, Indiana, and a Fitzgeralds-branded casino and hotel located in Tunica, Mississippi (Fitz Tunica). Additional information about The Majestic Star Casino, LLC, and its casino properties can be found at the company's website, www.majesticstar.com.

Additional Information

Certain statements contained in this press release that are not historical facts are forward-looking statements. Such forward-looking statements, which reflect our current views of future events and financial performance, involve certain risks and uncertainties. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as "may," "intend," "might," "will," "should," "could," "would," "anticipate," "expect," "believe," "estimate," "plan," "project," "predict," "potential," or the negative of these terms. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as our ability to generate sufficient working capital, our future results of operations and financial condition, expectations regarding the operation of our casino properties, and the sufficiency of our cash balances and cash generated from operating, investing, and financing activities for our future liquidity and capital resource needs. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to the factors under the headings "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors" in the Information Memorandum. Majestic assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

SOURCE The Majestic Star Casino, LLC

Related Links

http://www.majesticstar.com