Mr. Greff: I prefer not to.
TWST: Andrew, do you agree with what he said?
Mr. Zarnett: I do agree. The gaming industry has experienced its worst
recession since I've been covering it. It's being felt most in Las Vegas and
Atlantic City, as both of those markets have experienced or will experience
large increases in supply. Atlantic City is being impacted by regional supply
and Las Vegas has direct supply. The bright spots happened to be in the capital
markets, where the bond market and the bank loan market have recovered somewhat
over the course of the last three or four months. And at this point, with
nominal pullback, they have stayed very firm and allowed companies like MGM to
float new issues both on the equity and the debt side. The same holds true for
Harrah's, where they were able to take a piece of their first lien debt and
improve their bank covenants. And Ameristar, where they were able to term out
their bank facility into bonds, not the whole thing, but approximately half of
their total bank facility. And that meant a lot for those various companies, to
be able to move through this trough and hopefully to be able to see some sort of
recovery in their fundamental performance, maybe not next year, but in 2011. And
still, other companies have executed amendments for bank loan extensions, which
we call "amend and extend." They've used amendments to push out or to garner
covenant relief, and they have been able to extend out, in some cases, their
maturities. A good example there would be Wynn Las Vegas. So that's the bright
spot. The capital markets have been responsive. They have allowed companies to
get a little bit of oxygen so that they can make it through the toughest part of
the recession. We'll see. There's is more to be done in the case of some
companies, and we will see how that plays out.
Tickers included in this excerpt: ASCA, BYI, IGT, LVS, MGM, PENN, SHFL, WMS, WYNN
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