Station Casinos' future remains up in the air and its $5.7-billion debt load is weighing heavy. The locally headquartered operator of more than a dozen off-Strip casinos hasn't been making interest payments on its debt and is seeking yet another forbearance agreement to complement the one that has already expired while it awaits word on whether bondholders are amenable to the pre-packaged bankruptcy plan it filed in February.

Last week, it sought another month of forbearance from the holders of a majority of its senior and senior subordinated notes and the lenders holding a majority of the commitments under its credit agreement. "The lenders currently are seeking requisite approval for the extension of the forbearance agreements, which have expired," the company said in a statement.

The pre-packaged bankruptcy was offered up in February by Station Casinos and some of its lenders. It would pay investors 10 cents to 50 cents on the dollar in secured notes and cash in exchange for some $2.3 billion of existing bonds. Affiliates of the ownership, the Fertitta family and Colony Capital, have agreed to put up as much as $244 million in new capital to maintain their current interests in the company, according to Station Casinos.

Also in February, Boyd Gaming made a non-binding $950-million offer for several of Station's casino properties, saying it "would present a superior recovery to the unsecured creditors of Station versus the current Exchange Offer.""On March 2, concurrent with receiving the first of many forbearance agreements, Station Casinos shot down the offer.

The company lost $33.7 million in the first quarter, less than half of what it lost in the same year-earlier period, due mostly to a $40.3-million gain on the early retirement of debt, not improved property performance. Average occupancy fell 300 basis points year-over-year to 85% while the average daily room rate fell 26% to $71 from $98. Net revenue fell 20% to $282.7 million. Revenue from gaming, hotel rooms, and food and beverage sales all declined, according to the SEC filing. Operating revenue fell by more than half, to $27.7 million from $59.9 million.

Instant Insights /

MGM Catching Breath, Station Still Gasping

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