Caesars says to engage bank creditors over debt
Caesars Entertainment Corp and its subsidiary Caesars Entertainment Operating Co Inc (CEOC) said they would begin talks with bank creditors in order to revise part of the casino operator’s debt.
The companies have executed non-disclosure agreements with certain beneficial holders of debt issued by CEOC, including senior secured term loans, “enabling the commencement of formal discussions with the bank lenders”, Caesars said in a statement on Friday.
The consolidated company’s long-term debt reached US$24.2 billion at the end of June, up from US$20.9 billion in December, according to industry analysts.
Caesars is a major casino operator in the United States but has long coveted an operation in Asia. It is a joint venture investor in a planned casino resort at Incheon, South Korea. It hopes to open the first phase of the venue by 2018.
“This latest and important step further reflects our commitment to working constructively with creditors to deleverage CEOC and create a path toward a sustainable capital structure for CEOC that is in the best interest of all stakeholders,” said Gary Loveman, chief executive of Caesars Entertainment. Mr Loveman is also chairman of CEOC.
The move follows a similar announcement last month in which the Las Vegas-based company said it was in discussions with its senior bond holders in efforts to restructure the largest portions of its debt.
Earlier this month, the casino operator said it received a notice of default from a group of second-lien holders covering US$3.7 billion of the company’s debt.
In August, the firm announced a deal that it said it would reduce CEOC’s debt by US$548 million and cut interest expense by US$34 million annually.
But Fitch Ratings Service gaming analyst Alex Bumazhny told the Las Vegas Review Journal that “it was likely” that Caesars would have to resolve its issues through bankruptcy. Mr Bumazhny was quoted as saying “there were too many stakeholders” involved for the talks to be successful.
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