The Indiana Horse Racing Commission June 26 granted approval to Centaur, which owns the two racetracks in the state, to proceed with refinancing that won't impact revenue from slot machines that goes to purses and breed development programs.
The "replacement first lien facility," as it is called, will be funded by a syndicate of commercial banks, according to documents submitted by Centaur. The move will result in an annual interest savings of about $8 million.
Centaur first owned Hoosier Park Racing & Casino and emerged from bankruptcy several years ago. It then purchased Indiana Grand Race Course, formerly called Indiana Downs, which also had filed for bankruptcy protection under its previous owners.
When the refinancing was first addressed by the IHRC, Centaur planned to "subordinate" the funds–12% of gross slots revenue–that goes to purses and breed development for Standardbred, Thoroughbred, and Quarter Horse racing. According to testimony at the June 26 IHRA meeting that is no longer the case.
In an e-mail to Lea Ellingwood, general counsel for the IHRC, attorney Robin Babbitt, who represented Centaur at the June 26 meeting, said the company "has not granted a security interest in the horsemen's 12% allocation payments nor are those accounts designated as collateral for the first lien credit facilities." He said if there should be a default on the lien, Centaur said it will continue to make the statutory payments for purses and breed development.
For fiscal year 2013, the slots at the two tracks generated $55.91 million for purses and breed development programs for all breeds, according to IHRC statistics.
In another matter, Centaur received IHRC approval to build a new dormitory facility at Indiana Grand to accommodate demand created by the construction of new barns. The project will cost about $1.8 million, said Brian Elmore, vice president of racing for Centaur.
Indiana Grand already has 58 dorm rooms, all of which were renovated before the 2014 Thoroughbred meet began in the spring. Elmore said the new building will have 45 rooms.
The track currently has stall space for about 900 horses and plans to build stalls for another 100, Elmore said. Centaur also plans to build soccer fields at Indiana Grand and offer other amenities for grooms based at the track.