It was reported this morning that Yitzhak Tshuva and Nochi Dankner had come to an understanding with Credit Suisse and Goldman Sachs, which are financing the joint Plaza project venture in Las Vegas, for an extension of a $625 million loan until August 2012. It was further agreed that the interest rate in the loan agreement would not change, and no further collateral was required. It should be recalled that Dankner has recently acquired 3% of Credit Suisse.
US banks may have been given a lifeline by their government, but they do not extend credit easily. Sources inform "Globes" that the main condition for extending the loan is payment in cash of $100 million in interest all the interest for the next 42 months. This is an unusual term in the banking world. It seems though that Dankner and Tshuva had no alternative.
The annual interest rate on the loan is Libor plus 3.8%. It amounts to $40 million a year, or $140 million over the whole period, but talks are now taking place on reducing the debt in exchange for the one-time up-front payment.
Tshuva and Dankner own the project in equal shares: Dankner through IDB Holding Corp. Ltd. unit IDB Group USA Investments Inc. held equally by Discount Investment Corporation (TASE: DISI) and its subsidiary Property and Building Ltd., and Tshuva through Elad Properties. The 1.5-million square meter Plaza Hotel and Casino will have 3,500 rooms, and a 500,000-square meter residential project.
Published by Globes [online], Israel business news - www.globes.co.il - on January 29, 2009
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