Perry Corporation, the .9 billion hedge fund that is one of Caesars Entertainment Corp.’s major creditors has walked away from talks on restructuring the major portion of the casino company’s debt.
Caesars has been in talks with primary creditors to restructure $18.3 billion of the operator’s $24.2 billion in debt, in efforts to stave off bankruptcy that many view as all but inevitable. According to a report in Bloomberg News, the fund, run by Richard Perry, declined to extend a nondisclosure agreement that afforded access to private information about Caesars’ operating units, a privilege meant to facilitate the reorganization talks.
Caesars confirmed the refusal concerning the nondisclosure agreement in a filing with the federal Securities and Exchange Commission. In an interview with the Las Vegas Review-Journal, Fitch Ratings Service gaming analyst Alex Bumazhny said the SEC filing “reconfirms that there are a lot of moving parts, and getting a deal done would be a laborious process if at all possible.”
Caesars officials released a statement confirming that discussions continue with the operator’s other top debt-holders. “While no agreement has been reached yet on the terms of a restructuring, (Caesars is) continuing discussions with the remaining first-lien creditors, all of whom have extended their (nondisclosure agreements),” the company said.
According to the Bloomberg report, those first-lien debt-holders include Franklin Resources Inc., GSO Capital Partners LP, HG Vora Capital Management LLC, KKR & Co. (KKR), Och-Ziff Capital Management Group LLC and Fortress Investment Group LLC. The report cited unnamed sources in saying separate discussions are ongoing with first-lien bondholders Beach Point Capital Management LP, BlackRock Inc., Brigade Capital Management LLC, Elliott Management Corp., JPMorgan Asset Management Inc. and Pacific Investment Management Company.
Meanwhile, the company continues its legal battles with second-lien bondholders who filed default notices against the company earlier this month for $3.7 billion of the company’s debt.
Caesars has been mired in debt as a result of the $30.7 billion buyout of the operator in 2008 by two private hedge funds. Company CEO Gary Loveman has said restructuring debt with primary bondholders can get the operator’s balance sheet in order and avoid bankruptcy.
