Bonds to be rated Caa2 by Moody’s
Caesars Entertainment Corp., which is peddling secured bonds in an effort to lighten its debt load, has already sold $675 million of the bonds, reported Bloomberg last week. The casino operator has a staggering $23.3 billion in long-term debt load.
Caesars Growth Partners offered 9.375 percent, eight-year bonds, which are expected to be rated Caa2 by Moody’s Investors Service. CGP, a subsidiary of Caesars Entertainment, was created in 2013.
The bond sale is part of a $1.85 billion financing package that will fund the purchase of four casinos from the parent’s operating unit. The strategy has been challenged as potentially fraudulent by some debt holders, who are worried that Caesars is separating its assets into units in order to protect the most valuable properties from creditors.
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.