Caesars announces deal to cut debt by about US$550 mln

Aug 13, 2014 Newsdesk Latest News, Top of the deck, World  

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Caesars Entertainment Corp on Tuesday announced a deal that it says will reduce Caesars Entertainment Operating Co’s (CEOC) debt by US$548 million and cut interest expense by US$34 million annually.

“The transaction we are announcing today is the latest in a series of steps intended to deleverage CEOC and position it for a potential stock listing,” said Gary Loveman, chief executive of Caesars, in a statement.

The Las Vegas-based casino operator and its unit announced a transaction to purchase and retire US$238 million of CEOC’s outstanding 2016 and 2017 notes held by third parties. The notes represent 51 percent of each such class not held by affiliates of Caesars, the company said.

The parent company has also agreed to contribute to CEOC for retirement of US$393 million of CEOC’s 2016 and 2017 notes currently held by its other subsidiaries.

As part of the transaction, “CEOC received agreement for consents to amendments of certain terms of the notes and the indentures governing the notes,” Caesars said.

“The transaction will reduce CEOC’s leverage and interest payments. We are steadfast in our commitment to work constructively with creditors to deleverage CEOC and create value,” Mr Loveman added.

Caesars, a joint venture investor in a planned casino resort in South Korea, on Monday said its second-quarter loss widened from a year ago to US$466.4 million.

The company’s corporate debt stood at more than US$23 billion as of March 31. The company has sold assets, transferred properties between units, refinanced some debt and sold equity to stay solvent.

It emerged last week that the company is suing some institutional investors in a New York state court claiming they tried to push CEOC into default on a portion of the group’s debt.

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