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MoneyVancouver's Parq casino looks to refinance amid debt pressure

21:50  04 may  2019
21:50  04 may  2019 Source:   cbc.ca

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The Parq Vancouver , a luxury casino complex that opened to fanfare in 2017, is seeking to refinance its debt amid increasing financial pressure and missed debt payments. Andrew Hood, an equity research analyst at M Partners Inc., said since becoming operational, the complex brought in 0

The Parq Vancouver , a luxury casino complex that opened to fanfare in 2017, announced it has successfully refinanced its debt amid increasing financial pressure and missed debt payments. In a statement, the company says it has refinanced its loans with a fixed rate

Vancouver's Parq casino looks to refinance amid debt pressure© Evan Mitsui/CBC The facility, which opened in 2017, includes two luxury hotels, eight restaurants and a conference centre in addition to the casino.

The Parq Vancouver, a luxury casino complex that opened to fanfare in 2017, is seeking to refinance its debt amid increasing financial pressure and missed debt payments.

Andrew Hood, an equity research analyst at M Partners Inc., said since becoming operational, the complex brought in $170 million in revenue, incurred $152 million in expenses, for about $18 million of operating income.

However, its large debt coupled with a high-interest rate completely wiped out any income it made last year.

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Luxury casino Parq Vancouver ’ s parent company missed an interest payment on a second-lien loan as it struggles to refinance debt taken on to build one of the largest-ever private developments in British Columbia. Parq Holdings LP was downgraded to selective default from CCC by S&P Global

Parq Vancouver , the newest casino location in the area is financially struggling, as it became evident by its loss rate and the outstanding debt . It coincided with the official launch of the venue guaranteeing a bumpy start to Parq Vancouver ’ s operation. Third Party Needed for Debt Payments.

"If they want to be feasible moving forward, they must refinance that debt. There's no way they're going to make money as a business unless they refinance that debt," Hood said.

Vancouver's Parq casino looks to refinance amid debt pressure© Evan Mitsui/CBC Evan Mitsui/CBC

The building's owners took on about $450 million of debt in order to build the casino complex, which also includes two luxury hotels and eight restaurants and a conference centre.

Hood says Parq Vancouver made about $18 million of operating income in the 2018 fiscal year. However, he estimates its interest payments were about $30 million a quarter. Interest on its loans vary between over 7.5 to 12 per cent.

The complex has already deferred payment on one of its loans twice, most recently on Monday, Apr. 29.

Some positives for company

But Hood says Parq Vancouver can turn around its financial situation.

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At Parq Vancouver , adventure awaits. We are Vancouver ' s premiere entertainment destination. Stay and Play at Parq Casino and one of our luxury hotels. Remain informed about all of the latest news, special events, extraordinary adventures, and be the first to receive select offers from Parq Vancouver .

Drake said he was blocked from gambling at luxury resort Parq Vancouver ' s casino Friday night and is blaming "profiling" by the venue. Hosted by Phillip

"The positive is the company has said to S&P Global Ratings [a financial services company] that they're getting close to refinancing [the debt]," he said.

Vancouver's Parq casino looks to refinance amid debt pressure© Evan Mitsui/CBC Evan Mitsui/CBC

The high interest rates on its current loans were because the casino hadn't been built yet, Hood added. Now that the building is built and operated, there is less risk involved and it can justify getting a lower rate of interest.

In addition, 2018 was not a typical year for the company. There were still start-up costs — like employee training and extra marketing.

Once the business is up and running, Hood says it will be able to increase its income.

Impact of anti-money laundering rules?

Some have cited the B.C. government's new anti-money laundering regulations, introduced in December 2017, as one reason for Parq Vancouver's financial troubles.

But Hood says it's hard to deduce its impact.

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Parq Vancouver Casino features 600 slots and 75 table games for your entertainment. WCD also books casino hotel reservations in Vancouver . In addition to conference space, Parq Vancouver offers Vancouver ' s largest ballroom, hosting everything from international touring acts to your

Parq Vancouver is a resort with two luxury hotels and the only casino in Vancouver ' s downtown core. In a written statement, Parq Vancouver president Joe Brunini apologized for Drake's experience. "We are operating in one of the most complex, highly regulated industries and are always looking to better

"It's hard to say what number would be the effect, because it was [the casino's] first year operating," he said. "Generally, the casinos in the area have said the anti money-laundering regulations affected revenues ... [so] you could say that it's unfortunate timing."

He says Parq Vancouver should focus on building up more positive exposure to attract people to the facility.

"It's an impressive facility ... [and] people who visit Vancouver would certainly be interested in visiting it even if they're not gambling."

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