With credit markets locked down and largely unavailable to finance new gambling projects, Pinnacle Entertainment received additional 150-day delays in timelines to build new riverboat casino projects in Baton Rouge and Lake Charles. While Las Vegas-based Pinnacle is in much better shape in credit markets than many of its competitors, company officials told the Louisiana Gaming Control Board today that interest rates are still high for the projects to work financially.
Since 90-day delays for the south Baton Rouge casino and Sugarcane Bay resort were approved in February, Pinnacle’s bond rates have hovered around 15%, but other casino companies have seen their rates skyrocket from as much as 26% to 47%, says Carlos Ruisanchez, the company’s executive vice president for strategic planning and development. “This is not because of the credit quality of this company,” Ruisanchez says. “It’s because of the reluctance of investors to invest in the sector.”
Ruisanchez would not speculate on how low rates might have to go for the company to finance completion of the projects, but he says Pinnacle’s historic interest rates have been in single figures. Pinnacle plans to build a $250 million riverboat casino resort on River Road. The company says the casino, hotel, restaurants and entertainment complex would be the first phase of a massive resort. A golf course, retail and homes are planned for the land. Board Chairman Charles Gaudin says he doubted the delays would be the last Pinnacle would seek given the current national recession and tight credit.
