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.
"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.