Las Vegas-based Caesars Entertainment Corp “elected not to pay” US$225.3 million in interest to junior creditors while it continues debt restructuring negotiations with its more senior lenders, according to a regulatory filing.
The interest payment, due on second-tier debt covering its Caesars Entertainment Operating Co (CEOC) unit, has a 30-day grace period before a default occurs under the agreement, the casino operator said in a filing to the U.S. Securities and Exchange Commission on Monday.
Caesars has been looking to wrap up negotiations with senior creditors of CEOC, which is responsible for more than 80 percent of the company’s US$22.9 billion long-term debt as of September 30.
The company’s restructuring proposal would put the unit into Chapter 11 bankruptcy proceedings and allow it to emerge as a real estate investment trust.
CEOC is Caesars’ largest unit and controls several properties, including the flagship Caesars Palace (pictured) on the Las Vegas Strip.
The company said it remains engaged in confidential discussions with first-lien bondholders “regarding the material economic terms for a restructuring of CEOC’s debt”.
“No assurances can be made that a restructuring will be implemented or an agreement will be reached between Caesars, CEOC and CEOC’s creditors on the terms of a restructuring,” the casino operator said in Monday’s filing.
