Oaktree, Bain team up for Star Entertainment refi play


This year, as Street Talk first reported, Oaktree spent weeks discussing potential funding plans with Star and exploring structures that would have resulted in it injecting hundreds of millions of dollars in equity into the embattled casino giant. In the end, Star decided to go a different direction, raising money from investors including Bruce Mathieson, whose wealth sits at $2.13 billion, according to the Financial Review Rich List.

Oaktree also has form in the gaming sector offshore, having acquired poker machine developer Interblock last year, and previously owned gaming groups J&J Ventures and Cannery Casino Resorts.

It remains unclear who the other party is remaining in the refinancing discussions. Sources said Blackstone’s credit division had also considered whether to become involved as party of a full industry review. It is not seriously or actively considering taking part now, those sources added.

In July, Street Talk reported that refinancing term sheets were distributed not only to Oaktree and Bain, but to Apollo Asset Management and private equity player Cerberus Capital Management among others. They were returned with comments about where the parties saw pricing, margin they could give, and estimates around how much debt could be provided.

Star had $1.3 billion gross debt at the end of December, including $685 million in bank debt and $584 million in private placements. Its equity raising bumped down net debt from $1.1 billion to $341 million. Investors have since expressed concern, however, that the trip to debt markets may not be sufficient, and further equity may be required.

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