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Atlantic City Casino Looking for More Money

NOV 26, 2012 12:08pm ET

Revel AC Inc., the company that owns and operates Atlantic City’s newest casino, said it is in negotiations with a majority of its lenders in order to obtain additional capital for liquidity and to fund certain projects at the property.

Kevin DeSanctis, chairman and chief executive, said, “The additional capital will provide us with the liquidity to allow the market to recover from Hurricane Sandy and execute our strategic build-out of exciting new gaming, food and beverage, and entertainment amenities.

“These new offerings will allow us to enhance our product, improve our customer experience and create value for our stakeholders.

The Revel has been open for only six months but comes in with a checkered past when it comes to financing the project. Morgan Stanley at one time controlled 90% of the company behind the casino hotel, but bailed in 2010.

New Jersey had to step in and took actions in 2011 to help a troubled Atlantic City in general and the Revel in particular. This allowed the stalled project to get restarted.

In August of this year, Revel obtained a $100 million revolving credit facility.

The announcement the company was seeking financing was contained in its third quarter operating results. For 3Q12, Revel lost $87 million, on top of an $82 million net loss for 2Q12.

As a group, hotels which used CMBS financing had the highest delinquency rates among all types of commercial properties at 10.82% for September, according to Fitch Ratings.