Banks Offer Trump Added $65-Million Breather Loan

Donald Trump’s major bank leaders have tentatively agreed to give him a little breathing room, it was reported today.

The four lead banks agreed to lend him $65 million and defer interest and principal payments on about $850 million of the $3 billion in debt the developer ran up in building his real estate and gambling empire, the New York Times said.

But the package would be secured by nearly every asset in Trump’s empire, and the agreement hinges on getting other lenders, particularly Japanese banks, to agree, the newspaper said, citing unidentified people involved in the talks.

Trump has about $1 billion in junk bond debt in addition to roughly $2 billion in bank debt and is said to be in a cash crunch. His lenders are worried his properties are not generating enough cash to handle his debts.

Trump missed a roughly $43-million payment due last Friday on junk bonds used to finance the purchase of Trump Castle, one of his three Atlantic City hotel-casinos, but he has a grace period for making the payment.

The banks and Trump’s spokesman, Dan Klores, refused to comment on the talks. The four banks are Citicorp, Manufacturers Hanover Corp., Chase Manhattan Corp. and Bankers Trust Co.

The developer also has not yet made a $30-million debt payment due Manufacturers Hanover Corp.

The restructuring plan is aimed at helping Trump to keep making debt payments while waiting for his assets to rise in value so some could be sold.

His assets, which include hotels and office and apartment buildings in New York, have fallen in value because of the slumping real estate and casino markets. His Trump Shuttle also has posted disappointing results.