Recapitalizing The Donald –

Donald Trump’s hit reality show “The Apprentice” may be high in the ratings, but its contestants’ challenges are no match for those that Trump’s real-life “apprentice,” former UBS gaming banker Scott Butera, has to deal with.

Butera, hired by Trump in September as executive VP, director of corporate and strategic development, is charged with recapitalizing the highly leveraged Trump Hotels & Casino Resorts. So far, Butera seems to be on the right track, said analysts. On Feb. 12, THCR entered a $400 million agreement with DLJ Merchant Banking Partners, a Credit Suisse First Boston affiliate, to help THCR restructure its debt. In return for infusing THCR with the $400 million in equity, DLJ will become a majority shareholder of THRC, which will be renamed Trump International, and Trump will remain chairman.

But getting the deal done may not be easy, analysts said. Such dealings require reaching an agreement with the bondholders, who may still remember Trump’s threat in 2001 to withhold interest payments in order to force a restructuring. They might even recall the 1991 bankruptcy of the Taj Mahal casino.

Butera, who also has roots with CSFB and Smith Barney, has armed himself with one of the most experienced hands in the business, having retained UBS honcho Ken Moelis and his crew as financial advisors.

“They [bondholders and Trump] will play hardball against each other,” said Marc Falcone, managing director for gaming, lodging and leisure research at Deutsche Bank. “The bondholders have long dealt with Trump and his threats.”

Falcone, who said that the Trump organizations’ capital-market structure needed to be changed to free up capital to invest in its business, maintains that Butera has what it takes to do the job and will find the right structure for the deal.

“He’s a smart guy and has been around the business a long time,” Falcone said. “He has worked with Trump on a lot of things.”

Butera said he had worked with the Donald covering THCR for more than a year and had developed a relationship with him. The task at hand is clear to him.

“I think the company [THCR] is overleveraged and its interest rate is too high,” said Butera. “It’s important that we deleverage and reduce debt.”

THCR hasn’t had an annual profit in seven years and this year struggled against competition from the $1.1 billion Borgata Casino owned by Boyd Gaming Corp. and MGM Mirage. THCR just reported that its fourth-quarter loss widened to $40.9 million, or $1.37 a share, from $17.3 million, or $0.78 a share, a year earlier, and that revenue fell to $1.16 billion from $1.23 billion.

So just like the contestants on Trump’s “Apprentice” show, Butera has to beat the odds. If he is nervous, he is not showing it. “I came in to get the recap done,” Butera said. “That is the biggest reason I was brought on board.”