A 16% Leveraged Loan Is Painful But Necessary
Someone had to be the first to test the once red-hot market. Golden Nugget casino owner Tilman Fertitta took the plunge.
Tilman Fertitta is in survival mode.
Photographer: Chris Goodney/Bloomberg
Backed into a corner by the coronavirus pandemic, Texas billionaire Tilman Fertitta is rolling the dice in the leveraged-loan market.
Fertitta’s empire includes Golden Nugget casinos and restaurants under the Landry’s Inc. umbrella like Bubba Gump Shrimp Co., Morton’s The Steakhouse and Rainforest Cafe. Needless to say, the economic shutdown across America has wreaked havoc on all of those businesses. In a gambit to stockpile extra cash, Landry’s this week is dangling an unprecedented all-in yield of at least 16% to entice investors to buy into a new $250 million loan. It would be the first successful leveraged-loan deal in almost a month, assuming it draws enough commitments on Thursday.