Caesars Entertainment Corp. is closing in on sealing the support of remaining senior bondholders for the restructuring deal on debt of its largest unit, Caesars Entertainment Operating Company (CEOC), in the unit’s ongoing bankruptcy proceedings.
The deal would seal support from first-lien bondholders who did not agree to a restructuring deal in four months of negotiations aimed at eliminating more than half of CEOC’s $19.9 billion in debt. The restructuring would reduce CEOC’s obligations by around $10 billion, and would ensure that senior-level creditors recover most of their investment.
During the restructuring negotiations, Caesars reached agreement with holders of most of that $19.9 billion in debt, but the most senior bondholders, who own more than 56 percent of CEOC’s $5.35 billion in first-lien debt, rejected a proposal from the operator to accept a $150 million fee to sign onto the restructuring plan, which would split CEOC into two units, with properties owned by a real estate investment trust.
Reports from the bankruptcy court indicate that the most-senior group of lenders is close to accepting the restructuring plan, which would free Caesars to negotiate consent from enough other lenders to validate the restructuring plan.
Approval of the restructuring plan would also nullify lawsuits from lower-level creditors challenging the operator’s transfers of assets in advance of the deal. Those transactions also are being probed by an independent examiner appointed by Bankruptcy Judge Benjamin Goldgar.
