NorthStar Gaming Holdings Inc. entered into a credit agreement securing a CA$43.4 million (US$30.1 million) senior secured first lien term loan. Beach Point Capital Management LP is providing it, while Playtech Plc and some of its subsidiaries offer credit support for certain commitments to solidify the deal.
This agreement is pending final approval from the TSX Venture Exchange and is a milestone event for NorthStar. It's expected to strengthen the company’s financial health and support the advancement of its strategic growth initiatives.
It calls for a SOFR (Secured Overnight Financing Rate) plus 9.35% interest, at a floor value for the SOFR of 4.4% as the credit facility. The term loans mature on Jan. 24, 2030. The term includes a 30-month deferral period before payment starts.
A grace period follows, during which NorthStar makes quarterly payments starting at an annual 2.5% of the principal for the first 42 months and then increasing to an annual 5% payment rate to maturity.
According to a statement NorthStar released, company will use the funds for the following purposes:
● Repaying CA$9.5 million in principal, along with accrued interest, previously borrowed from Playtech via unsecured promissory notes issued Apr. 25, Sept. 13, and Dec. 16, 2024.
● Establishing an interest reserve account with CA$7 million dedicated to this credit facility.
● Providing working capital and supporting general corporate expenditures.
● Covering costs related to the transaction for the credit facility.
Playtech receives equity-based compensation
The share purchase warrants entitle Playtech to 32,735,295 common share purchase warrants with exercise prices set at CA$0.055 per common share, with approximately an 8.7% premium in price over NorthStar's current five-day VWAP since Jan. 24, 2025, ending today, or the expiration of this engagement agreement.
Per securities regulations, the warrants issued aren't transferable and carry a statutory four-month trading hold. The warrants expire on Jan. 24, 2030. If NorthStar pays down or repays the principal amount within the first year, the expiry date for a proportionate number of the warrants accelerates.
It’s not the first time Playtech got involved in NorthStar Gaming’s financial deals, helping the company complete a $10.3 million deal in Nov. 2023.
What NorthStar Gaming does
NorthStar operates NorthStar Bets, a Canadian online gaming company. During 2023, NorthStar Bets surpassed a $1 billion betting handle. In the same year, it saw 240% revenue growth compared to the previous year. Gross gaming revenue also increased 205% from 2022 to 2023.
NorthStar is publicly traded, with its common shares listed on the Toronto Stock Venture Exchange under the ticker symbol BET and on the OTCQB market under the ticker NSBBF.
