Long-Term Debt

12 Months Ended

Dec. 31, 2011

Long-Term Debt

Long-Term Debt

NOTE 4 - Long-Term Debt

At December 31, 2011 and 2010, long-term debt consisted of the following:

(amounts in thousands)	2011		2010
Commerzbank credit facility (a):
Amortized loan	3,156		4,920
Revolving credit line	1,761		1,837
IMT LLC loan (b)	1,197		1,197
Ceska Municipal Loan (c)	441
	6,555		7,954
Less current portions:
Commerzbank amortized loan	1,578		1,640
Commerzbank revolving credit line	1,761
Ceska Municipal Loan	151
	$	3,065	$	6,314

(a)	In November 2009, the Company amended its long-term debt (former revolving credit line) with a new credit facility from Commerzbank Aktiengesellschaft, pobocka Praha (“Commerzbank”). The new credit facility allowed the Company to retire its prior revolving credit line and replace it with a combination of a term loan and a new smaller revolving credit line. The credit facility is provided in two tranches: an amortized, four-year term loan of CZK 125,000 (or $6,300 at the December 31, 2011 exchange rate), with interest based on the three-month Prague Interbank Offered Rate (“PRIBOR”) plus 500 basis points, and a two-year revolving credit line of CZK 40,000 (or $2,000 at the same exchange rate), with interest based on, depending on each draw request, the one, two, three or six-month PRIBOR plus 400 basis points, with the Company’s option to renew the term for one-year. The revolving credit line was reduced, as per the terms of the agreement, to CZK 35,000 (or $1,761 at the same exchange rate) after 12 months from the signing date, in November 2010. The credit facility includes financial covenants, and requirements, which are: (i) a mandatory annual prepayment that requires that 25% of the Company’s excess cash above a certain annually-escalating bank balance at the end of each fiscal year be applied toward the repayment of the term loan’s principal balance; (ii) the pledge of the Route 59 and Route 55 casinos, Hotel Savannah and their underlying land, and other guarantees as security; and (iii) the term loan to be repaid quarterly in equal principal installments, with the applicable three-month PRIBOR rate plus the said basis points. The term loan matures on November 4, 2013. As of December 31, 2011, the Company had fully drawn down the revolving credit line of CZK 35,000, or $1,761, and had a principal balance of $3,156 on its amortized term loan. The Company is in full compliance with the credit facility’s financial covenants up to and including the year ended December 31, 2011. On January 31, 2011, the terms of its revolving credit line were amended to extend the expiration to November 4, 2012. Furthermore, as part of this amendment, the applicable quarterly interest rate margin on the term loan and the revolving credit line will increase by an additional 100 basis points, to 600 basis points and 500 basis points, respectively. For the years ended December 31, 2011 and 2010, the weighted average of the interest rates on the drawn amounts were approximately 6.12% and 6.24%, respectively.
(b)	In August 2009, as part of TWC’s partnership with Vigotop Limited, a Cyprus-based company, to form a Hungarian company, KC Bidding Kft. (“KCB”), in which TWC became holder of a 25% equity interest, TWC extended KCB a 3-year, 1.0% interest per annum loan of approximately €930, or $1,200, to form a Hungarian license concession company, SDI Europe Kft. (“SDI”), for the purpose of eventually operating the Class I casino in Hungary. SDI is a wholly-owned subsidiary of KCB. Through SDI’s intermediary, IMT LLC, a Delaware-based company, TWC received a three-year, 2.1505% interest per annum loan of approximately $1,200. TWC expects the full lump sum repayment of the loan, upon maturity in August 2012, from KCB, to offset its outstanding loan with IMT LLC. TWC management believes the loan to KCB is fully collectible. In the event KCB defaults in its repayment obligation to ACC with respect to the above mentioned loan, IMT will cancel the loan obligation from ACC to IMT and ACC will no longer be obligated to pay off the loan balance of approximately €930, or $1,200. In November 2010, the loan agreement between ACC and KCB was amended to change the maturity date to January 31, 2016 from December 31, 2012 and to establish an interest rate of 1% from January 1, 2012 through the new maturity date of the loan. In March 2011, the loan agreement between IMT and ACC was amended to change the maturity date to February 21, 2016 from January 31, 2013, and to establish an interest rate of 1% from January 1, 2012 through the new maturity date of the loan.
(c)	In November 2011, TWC purchased the Ceska casino building, associated land and an adjacent outbuilding and related plot from the town of Ceska Kubice, from which TWC had been renting the facilities.  In conjunction with this purchase, TWC was granted by the township of Ceska Kubice a three-year municipal loan of CZK 9.0 million, or $454,000. The loan is payable monthly and matures on November 23, 2014.

Principal payments due on long-term debt are as follows:

Year ending December 31,	(amounts in thousands)
2012	$	3,490
2013	1,729
2014	139
2015
2016	1,197
	$	6,555

On July 8, 2010 TWC satisfactorily retired, pursuant to the terms of the Replacement Notes, the Company’s unsecured promissory notes aggregating a principal balance of $1,550 which had matured on June 26, 2010, along with a total payment of $295 in associated deferred and accrued interest.