Taking stock: Gaylord gets a deal on its debt

Also: Delek boosts borrowing capacity, tacks on $15M

Email | Print By Geert De Lombaerde

Facing a soft hotel market and the opportunity to book a one-time gain, Gaylord Entertainment last month bought back more than 3 percent of its debt for 56 cents on the dollar.

The company spent $25.6 million to buy back $45.8 million in principal of its 8 percent and 6.75 percent notes maturing in 2013 and 2014. The move will add a $13 million after-tax gain to Gaylord’s fourth-quarter numbers and officials say they will look for other opportunities to buy back some of their senior notes, of which more than $600 million is still outstanding.

Separately, Gaylord detailed its November hotel results and provided a glimpse at December numbers. For the two months, same-store hospitality revenue fell 5.4 percent and 4.8 percent, respectively.

Including the new Gaylord National resort, revenue for the two months came in at $149 million. Operating income for November was $5.0 million, down from a third-quarter average of just over $6.0 million.

Chairman and CEO Colin Reed said late 2008 bookings, visitor spending and holiday attraction sales also were off from the year before, but said “our focus will again be on our group business” in the first part of this year.

“With the Gaylord National project closed out we have satisfied our last committed capital expenditure,” Reed said. “Going forward we will be aggressive in our effort to maximize operating results while being cautious in our capital spending to reduce leverage.”

Since hitting bottom the week before Thanksgiving, shares of Nashville-based Gaylord (Ticker: GET) have more than doubled, although they are still 60 percent below their Labor Day levels.

On the flip side of the debt coin, Delek US Holdings, the parent of Mapco Express, disclosed yesterday that it inked two separate debt-related deals in the last few days of 2008.

First, the company on Dec. 29 amended its credit agreement with Lehman Brothers/J.P. Morgan to allow it to take on another $60 million of debt while also increasing its ability to sell off assets.

A day later, the company’s Delek Finance unit signed a deal with the Israel Discount Bank of New York for a $15 million, one-year promissory note and a $30 million term loan. Those instruments take the place of a $15 million promissory note that was set to come due this May.

Delek had total debt load of about $230 million on Sept. 30, which amounted to about 44 percent of its equity. The company’s shares (Ticker: DK) closed Monday trading up 6.7 percent at $5.86. They are down 32 percent in the past six months.