Caesars Entertainment is set to begin talks with several senior bondholders in its effort to restructure the largest portions of its staggering .2 billion in debt.
In a filing with the Securities and Exchange Commission, Caesars announced “non-disclosure agreements with certain beneficial holders” to discuss restructuring debt due in 2020. Bloomberg News reported last week that the talks would involve at least five senior bondholders: Pacific Investment Management Co., Elliott Management, BlackRock, Brigade Capital Management and Beach Point Capital Management. The companies have agreed to enter confidentiality agreements with Caesars to formally begin talks.
In an interview with the Las Vegas Review-Journal, Caesars Entertainment Chairman Gary Loveman said the company “had made progress” with its unsecured creditors and talks with the first -lien holders “was an important step” in moving forward in repairing the company’s balance sheet.
“I believe constructive discussions will occur,” Loveman said. “Our aim is to get something resolved in the next few weeks.”
Caesars’ negotiations with senior bondholders have been interrupted twice by lawsuits from groups of junior bondholders who claim the operator’s negotiations with first-lien holders will leave them holding the bag for billions in Caesars’ debt.
Loveman has described Caesars Entertainment as the holding entity for three subsidiary organizations, “two of which are in very good health. A third is over-levered and has pressing debt issues.”
Caesars Entertainment Resort Properties includes the Linq development on the Strip, and Caesars Growth Partners operates six resorts and the company’s online and social gaming products.
Caesars Entertainment Operation operates the other 44 Caesars, Harrah’s and Horseshoe casino properties in 13 states,. Including Caesars Palace, Caesars Atlantic City, Harrah’s Reno and several regional properties. Casinos and properties held under CEOC owe roughly 80 percent of the company’s overall debt. “It’s important to make that distinction,” Loveman told Bloomberg. “It is one part of Caesars. It is not by any means all of Caesars.” He said the company is committed 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.”
Loveman also told Bloomberg that the operator has no plans to close any more properties in the immediate future. The company has closed two properties this year—Harrah’s Tunica and Showboat in Atlantic City.
