HOUSTON Landry’s Restaurants Inc. is seeking new financing to replace its current credit agreement and outstanding 7.5-percent unsecured notes that total $400 million because a delay in filing financial statements led the majority of the company’s note holders and the trustee, U.S. Bank, to call for immediate payment of the unpaid principal and interest, the company reported Wednesday.
Landry’s said it believed it would be able to refinance the debt, but that “the recent tightening of the credit markets” may lead to less favorable terms than the company could have secured weeks ago.
Landry’s, which operates more than 200 casual-dining restaurants under various brands, in addition to hotels and casinos, began last year a voluntary internal review of the company’s historic stock option granting practices, which has led to a delay in the filing of financial results for the year ended Dec. 31, 2006. The company said in its July 25 statement that even though the review is expected to be complete “within the next few weeks,” it was notified by U.S. Bank that the unpaid principal, a premium, if any, and accrued and unpaid interest on all of the notes outstanding was immediately due.
Because the maturity of the notes was accelerated, Landry’s also became non-compliant with its $450 million credit agreement with Wachovia Bank, the company said. Wachovia has not accelerated the indebtedness under the credit agreement, Landry’s reported, and the company expects to obtain a waiver. The total amount outstanding under that agreement is about $97 million, Landry’s reported.
The company’s $545 million credit facility secured for Landry’s Golden Nugget gaming properties is not impacted, the company said.
