Red Rock Resorts, Inc.RRR
Red Rock Resorts, Inc. Debt Disclosure
Long-term Debt
Long-term debt consisted of the following (amounts in thousands):
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
Term Loan B Facility due February 7, 2027, interest at a margin above SOFR or base rate (7.71%) at December 31, 2023, interest at a margin above LIBOR or base rate (6.64%) at December 31, 2022, net of unamortized discount and deferred issuance costs of $15.9 million and $20.4 million at December 31, 2023 and 2022, respectively | $ | 1,442,054 | $ | 1,452,926 | |||||||
Term Loan A Facility due February 7, 2025, interest at a margin above SOFR or base rate (6.96%) at December 31, 2023, interest at a margin above LIBOR or base rate (5.89%) at December 31, 2022, net of unamortized discount and deferred issuance costs of $0.6 million and $1.1 million at December 31, 2023 and 2022, respectively | 152,955 | 161,898 | |||||||||
Revolving Credit Facility due February 7, 2025, interest at a margin above SOFR or base rate (6.96%) at December 31, 2023 and interest at a margin above LIBOR or base rate (5.89%) at December 31, 2022 | 512,000 | 149,500 | |||||||||
4.625% Senior Notes due December 1, 2031, net of unamortized deferred issuance costs of $4.9 million and $5.5 million at December 31, 2023 and 2022, respectively | 495,006 | 494,499 | |||||||||
4.50% Senior Notes due February 15, 2028, net of unamortized discount and deferred issuance costs of $4.7 million and $5.6 million at December 31, 2023 and 2022, respectively | 686,129 | 685,126 | |||||||||
Other long-term debt, weighted-average interest of 3.88% at December 31, 2023 and 2022, respectively, net of unamortized discount and deferred issuance costs of $0.1 million and $0.2 million at December 31, 2023 and 2022, respectively | 39,618 | 40,827 | |||||||||
| Total long-term debt | 3,327,762 | 2,984,776 | |||||||||
| Current portion of long-term debt | (26,104) | (26,059) | |||||||||
| Long-term debt, net | $ | 3,301,658 | $ | 2,958,717 | |||||||
Credit Facility
Station LLC’s credit facility consists of the Term Loan B Facility, the Term Loan A Facility and the Revolving Credit Facility (collectively, the “Credit Facility”). On June 6, 2023, the Company entered into the Seventh Amendment to the Credit Agreement for its Credit Facility to replace customary LIBOR language, including, but not limited to, the use of rates based on Term SOFR (“SOFR”). Effective July 1, 2023, the Term Loan B Facility bears interest at a rate per annum, at Station LLC’s option, equal to either SOFR plus 2.25% or base rate plus 1.25% and the Term Loan A Facility and Revolving Credit Facility bear interest at a rate per annum, at Station LLC’s option, equal to either SOFR plus an amount ranging from 1.50% to 1.75% or base rate plus an amount ranging from 0.50% to 0.75%, depending on Station LLC’s consolidated total leverage ratio. No other material terms of the Credit Facility were amended.
Prior to the amendment of the Credit Facility described above, the Term Loan B Facility bore interest at a rate per annum, at Station LLC’s option, equal to either LIBOR plus 2.25% or base rate plus 1.25%, and the Term Loan A Facility and Revolving Credit Facility bore interest at a rate per annum, at Station LLC’s option, equal to either LIBOR plus an amount ranging from 1.50% to 1.75% or base rate plus an amount ranging from 0.50% to 0.75%, depending on whether Station LLC’s consolidated total leverage ratio exceeds 4.00 to 1.00.
Station LLC is required to make quarterly principal payments of $3.8 million on the Term Loan B Facility and $2.4 million on the Term Loan A Facility on the last day of each quarter, unless otherwise reduced by prepayments. Station LLC also is required to make mandatory payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, asset sales and equity issuances and, depending on its consolidated total leverage ratio, Station LLC is required to apply a portion of its excess cash flow to repay amounts outstanding under the Term Loan B Facility, which would reduce future quarterly principal payments. The Company is not required to make an excess cash flow payment for 2023.
Borrowings under the Credit Facility are guaranteed by all of Station LLC’s existing and future material restricted subsidiaries and are secured by pledges of all of the equity interests in Station LLC and its material restricted subsidiaries, a security interest in substantially all of the personal property of Station LLC and the subsidiary guarantors, and mortgages on the real property and improvements owned or leased by certain of Station LLC’s subsidiaries.
The Credit Facility contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the ability of Station LLC and the subsidiary guarantors to incur debt; create a lien on collateral; engage in mergers, consolidations or asset dispositions; pay distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; or modify their lines of business.
The Credit Facility also includes certain financial ratio covenants that Station LLC is required to maintain throughout the term of the Credit Facility and measure as of the end of each quarter. At December 31, 2023, these financial ratio covenants included an interest coverage ratio of not less than 2.50 to 1.00 and a maximum consolidated total leverage ratio of 5.25 to 1.00. A breach of the financial ratio covenants shall only become an event of default under the Term Loan B Facility if the lenders within the Term Loan A Facility and the Revolving Credit Facility take certain affirmative actions after the occurrence of a default of such financial ratio covenants. Management believes the Company was in compliance with all applicable covenants at December 31, 2023.
At December 31, 2023, Station LLC’s borrowing availability under its Revolving Credit Facility, subject to continued compliance with the terms of the Credit Facility, was $479.3 million, which was net of $512.0 million in outstanding borrowings and $39.8 million in outstanding letters of credit and similar obligations.
In February 2025, the Revolving Credit Facility and Term Loan A with outstanding balances as of December 31, 2023 of $512.0 million and $153.6 million, respectively, will become due. The Company is currently in discussions with its lenders and believes it is probable that these obligations will be refinanced on a long-term basis in 2024.
4.625% Senior Notes
In November 2021, Station LLC issued $500.0 million in aggregate principal amount of 4.625% Senior Notes due 2031, pursuant to an indenture dated as of November 26, 2021, among Station LLC, the guarantors party thereto and Computershare Trust Company, National Association, as Trustee. The net proceeds of the sale of the 4.625% Senior Notes were used, together with borrowings under the Revolving Credit Facility, to (i) make a distribution of approximately $344 million to holders of LLC Units, including the Company, (ii) pay the purchase price for shares of Class A common stock tendered in the equity tender offer described in Note 9, (iii) pay fees and costs associated with such transactions and (iv) for general corporate purposes. Interest on the 4.625% Senior Notes is paid every six months in arrears on June 1 and December 1, which commenced on June 1, 2022.
The 4.625% Senior Notes and the guarantees of such notes by certain of Station LLC’s subsidiaries are general senior unsecured obligations.
On or after June 1, 2031 (the date that is six months prior to the maturity date of the notes), Station LLC may redeem all or a portion of the 4.625% Senior Notes at a redemption price equal to 100.00% of the principal amount redeemed, plus accrued and unpaid interest, if any, to the redemption date.
The indenture governing the 4.625% Notes requires Station LLC to offer to purchase the 4.625% Notes at a purchase price in cash equal to 101.00% of the aggregate principal amount outstanding plus accrued and unpaid interest thereon if Station LLC experiences certain change of control events (as defined in the indenture). The indenture also requires Station LLC to make an offer to repurchase the 4.625% Notes at a purchase price equal to 100.00% of the principal amount of the purchased notes if it has excess net proceeds (as defined in the indenture) from certain asset sales.
The indenture governing the 4.625% Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 4.625% Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 4.625% Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 4.625% Notes to be declared due and payable.
4.50% Senior Notes
In February 2020, Station LLC issued $750.0 million in aggregate principal amount of 4.50% Senior Notes due 2028 pursuant to an indenture dated as of February 7, 2020, among Station LLC, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee. The net proceeds of the sale of the 4.50% Senior Notes were used (i) to repay a portion of the amounts outstanding under the Credit Facility, (ii) to pay fees and costs associated with the offering and (iii) for general
corporate purposes. Interest on the 4.50% Senior Notes is paid every six months in arrears on February 15 and August 15, commencing on August 15, 2020.
The 4.50% Senior Notes and the guarantees of such notes by certain of Station LLC’s subsidiaries are general senior unsecured obligations.
On or after February 15, 2023, Station LLC may redeem all or a portion of the 4.50% Senior Notes at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest to the applicable redemption date:
| Years Beginning February 15, | Percentage | ||||
| 2023 | 102.250 | % | |||
| 2024 | 101.125 | % | |||
| 2025 and thereafter | 100.000 | % | |||
The indenture governing the 4.50% Senior Notes requires Station LLC to offer to purchase the 4.50% Senior Notes at a purchase price in cash equal to 101.00% of the aggregate principal amount outstanding plus accrued and unpaid interest thereon if Station LLC experiences certain change of control events (as defined in the indenture). The indenture also requires Station LLC to make an offer to repurchase the 4.50% Senior Notes at a purchase price equal to 100.00% of the principal amount of the purchased notes if it has excess net proceeds (as defined in the indenture) from certain asset sales.
The indenture governing the 4.50% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 4.50% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 4.50% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 4.50% Senior Notes to be declared due and payable.
Other Long-term Debt
Other long-term debt primarily represents a term loan agreement, which matures in December 2025. The term loan is secured by the Company’s corporate office building and is not guaranteed by Station LLC or its restricted subsidiaries under the Credit Facility.
Principal Maturities
As of December 31, 2023, scheduled principal maturities of Station LLC’s long-term debt for each of the next five years and thereafter were as follows (amounts in thousands):
| Years Ending December 31, | |||||
| 2024 | $ | 26,104 | |||
| 2025 | 708,616 | ||||
| 2026 | 15,440 | ||||
| 2027 | 1,412,068 | ||||
| 2028 | 690,905 | ||||
| Thereafter | 500,895 | ||||
| 3,354,028 | |||||
| Debt discounts and issuance costs | (26,266) | ||||
| $ | 3,327,762 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 21, 2024 | Showing above |
| 2022 | Feb 24, 2023 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 13, 2017 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.