Hard Rock Las Vegas in danger of missing debt payment

The owner and operator of the Hard Rock Hotel & Casino Las Vegas is facing an August 25 deadline to pay interest owed on its debt under a forbearance agreement with its lender, reports The Deal Pipeline. However, BREF HR LLC told the SEC that it doesn't have the necessary funds to make the payment.

According to an August 12 filing with the SEC, BREF owes $48.6 million in pay-in-kind interest to its lender, Vegas HR Private Ltd., on roughly $911.25 million in debt due March 1, 2018.

The debt is priced at Libor plus 250 basis points with a 1.5-percent floor on Libor. There is also supplemental interest on the debt equal to the greater of 6.5% or Libor plus 400 basis points, according to the filing, which reflects BREF's results for the second quarter ending June 30.

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.

"The company is currently assessing its options to satisfy the PIK interest payment obligation, including, but not limited to, negotiating a waiver of this requirement from the lender, selling off a portion of existing collateral or attempting to obtain borrowings from other sources," the company said in its quarterly report.

BREF was formed by affiliates of property, power and infrastructure asset manager Brookfield Asset Management Inc. in 2011 in order to take over ownership of the Hard Rock through a transaction in lieu of a foreclosure.


Suggested Articles

The program has already allocated $520 billion in loans to nearly 5 million businesses nationwide, and a further $130 billion still is available.

New Paycheck Protection Program forms cut documentation requirements and aim to make debt elimination easier. 

Hotels that do not restructure will not be able to compete with those that do, and revenues ultimately lag the comp set.