This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Caesars Launches Massive Refinancing

Stocks in this article: CZR

NEW YORK ( The Deal) -- Caesars Entertainment (CZR) has launched an initiative to refinance a total of $4.85 billion in debt, giving bondholders in its property unit a better-than-expected deal.

Under the refinancing plan, holders of $4.4 billion in commercial mortgage-backed securities (CMBS) will receive $0.99 on the dollar plus accrued and unpaid interest while holders of $450 million in mezzanine debt will receive $0.90 on the dollar plus accrued and unpaid interest, according to a Sept. 17 statement.

Private equity-backed Caesars is sweetening the deal for new debt holders by throwing in its Octavius Tower and Linq assets--Las Vegas properties from its Caesars Operating Co. unit--as security on their loans.

To fund the refinancing, the Las Vegas-based casino and hotel operator plans to issue a $3 billion term loan, a $269.5 million revolving credit facility, $500 million in first-lien notes, and $1.35 billion in second-lien notes.

Caesars hasn't released information about the pricing of these new loans, but a bondholder in the property company said in a Sept. 18 interview that the company plans to price the first-lien loan at Libor plus 550 basis points with a 1% floor and a 99 offer price.

The casino operator hopes to price its $500 million in first-lien notes at 7% and its $1.35 billion in second-lien notes at 9.5% to 10%, the source added.

He thinks a 7% coupon for the first liens makes sense, but 9.5% to 10% seems too low for the second-lien notes. He believes 11% would be more reasonable, although the company may be able to swing a lower coupon price due to investors' hunger for yield.

The main point of this refinancing isn't to reduce Caesars' staggering debt load of $23.5 billion, as the discounts on the buyback are mild. The primary focus would be the elimination of worrisome debt maturities in 2015. This refi would give Caesars more time to work out a comprehensive restructuring to tackle its debt problem.

Now that the property company refinancing is underway, "All eyes are on the disaster at OpCo Caesars Operating Co. ," the bondholder said.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs