Item 1.01Entry into a Material Definitive Agreement.
On September 3, 2020, Monarch Casino & Resort, Inc. (the "Company") entered into
the Fourth Amended and Restated Credit Agreement with Wells Fargo Bank, N.A., as
administrative agent and certain banks (the "Fourth Amended Credit Facility").
The Fourth Amended Credit Facility amends and restates the Company's $250.0
million credit facility, dated as of July 20, 2016 (filed as Exhibit 10.04 to
the Company's Form 10-K filed on July 21, 2016) (the "Amended Credit Facility").
As of September 2, 2020, the Company had an outstanding principal balance of
$191.3 million under the Amended Credit Facility; this balance, along with
various costs related to the preparation and closing of the Fourth Amended
Credit Facility, were carried into the Fourth Amended Credit Facility at
closing, and classified as long-term debt.
The Fourth Amended Credit Facility extends the maturity date of the Amended
Credit Facility from July 20, 2021 to September 3, 2023. In addition, the Fourth
Amended Credit Facility increases the aggregate principal amount of the credit
facilities to $270.0 million. The Company may use borrowings from the Fourth
Amended Credit Facility to pay for costs to be incurred for the completion of
the expansion project of Monarch Casino Black Hawk in Black Hawk, Colorado, for
ongoing working capital needs and for general corporate purposes.
The $270.0 million Fourth Amended Credit Facility consists of: $200 million term
loan ("Term Loan Facility") and $70 million revolving credit facility
("Revolving Credit Facility"). On the terms and subject to certain conditions
thereunder, the Company may request an increase of up to an additional $75.0
million under the Revolving Credit Facility. The Company is required to make
quarterly principal payments under the Term Loan Facility, commencing on
December 31, 2020, in an amount equal to (x) the percentage set in the Fourth
Amended Credit Facility (i.e., 1.25% for the period from December 31, 2020 to
September 30, 2021, and 2.50% for the period from December 31, 2021) multiplied
by (y) $200.0 million. Commencing with the delivery of the compliance
certificate for fiscal year 2021, the Company may be required to prepay
borrowings under the Fourth Amended Credit Facility using excess cash flows for
each fiscal year, depending on the Company's leverage ratio.
The interest rate under the Fourth Amended Credit Facility is LIBOR (the London
Interbank Offered Rate) plus a margin ranging from 1.75% to 3.25%, or a base
rate (as defined in the Fourth Amended Credit Facility) plus a margin ranging
from 0.75% to 2.25%. The applicable margins will vary depending on the Company's
leverage ratio. There will be a LIBOR floor of 0.50%. The Fourth Amended Credit
Facility also provides for benchmark replacement mechanics in respect of the
discontinuation of LIBOR.
The Company's obligations under the Fourth Amended Credit Facility are secured
by substantially all of the Company's assets. The Fourth Amended Credit Facility
includes customary covenants and events of default. Commencing on December 31,
2020, the Company should comply with the following financial covenants: maximum
total leverage ratio, minimum fixed charge coverage ratio and minimum
The foregoing summary of the Fourth Amended Credit Facility does not purport to
be complete and is qualified in its entirety by reference to the Fourth Amended
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
To the extent required by Item 2.03 of Form 8-K, the information regarding the
Fourth Amended Credit Facility set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated by reference in this Item 2.03.
Item 9.01Financial Statements and Exhibits.
Fourth Amended and Restated Credit Agreement, dated as of September 3,
2020, among Monarch Casino & Resort, Inc., Golden Road Motor Inn, Inc. and
10.13* Monarch Growth Inc., as Borrowers, the Lenders named therein, and Wells
Fargo Bank, National Association, as Administrative Agent, L/C Issuer and
Swing Line Lender
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the Inline XBRL document)
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