Company will use billion in proceeds to pay down debt
Last week the Louisiana Gaming Control Board approved the sale of Caesars Entertainment’s Harrah’s New Orleans property to a company subsidiary, Caesars Growth Partners. The sale was OK’d Monday, May 19, and closed Tuesday, May 20.
In conjunction with the closing, Caesars Growth Partners used the $2 billion in proceeds from the sale to refinance a loan it took out to buy three Las Vegas properties: Bally’s Las Vegas, the new Cromwell, and the Quad. The financing includes refinancing $476.9 million in debt covering Planet Hollywood.
Caesars has a challenging $21 billion in long-term debt load, and has been spinning off a number of casinos and other businesses into subsidiaries.
Investors and bondholders have expressed concern about the approach. Some fear that by placing its assets into different entities, Caesars is trying to shield its most valuable properties, and may allow less important ones to go bankrupt.
On April 8, Standard & Poor’s cut Caesars’ credit rating to CCC-, citing an unsustainable capital structure and the possibility of restructuring for the parent.
Parent company Caesars Entertainment owns 58 percent of Caesars Growth Partners, which also owns the unfinished Horseshoe Baltimore, a hotel tower at Caesars Palace, and the company’s interactive gaming business, which includes its online gaming operations in Nevada and New Jersey and the World Series of Poker.