May 6, 2014
/PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars Entertainment") today announced a series of steps designed to position its subsidiary, Caesars Entertainment Operating Co. ("CEOC"), for a stock listing and significant deleveraging.
The actions include:
- a new $1.75 billion first lien debt offering by CEOC, the proceeds of which will be used to redeem all of CEOC's existing 2015 maturities and repay existing bank debt;
- the sale by Caesars Entertainment of 5% of CEOC's equity to institutional investors, in connection with which Caesars Entertainment has agreed that CEOC will pursue a listing of such shares in the future;
- the closing of the previously announced sale of three CEOC-owned Las Vegas properties to Caesars Growth Partners;
- the launch of an amendment of CEOC's credit facility;
- expansion of CEOC's board of directors, with the intention of adding two new independent directors following regulatory approval.
"The actions we are taking today, combined with previous capital structure improvements and our investments to expand and upgrade our network as well as our ongoing focus on operational efficiency, lay the foundation for both significant deleveraging and value creation at CEOC," said
, Chairman and CEO of Caesars Entertainment. "Our past actions have created substantial value in two stable structures, Caesars Entertainment Resort Properties ("CERP") and Caesars Growth Partners, with standalone equity market capitalizations of
at Caesars Entertainment and
at Caesars Acquisition Company, the managing member and 42% economic owner of Caesars Growth Partners, implying over
of equity value at Caesars Growth Partners. With the completion of CEOC's sale of Bally's
, The Cromwell and The Quad Resort & Casino and the anticipated closing of the sale of Harrah's
to Caesars Growth Partners, CEOC will have more than
in cash and will have sold its most capital-intensive and longer-term payout projects to Caesars Growth Partners. The transaction is designed to ensure continued access for CEOC and each of the properties being sold to the Total Rewards network and other Caesars resources."
Loveman continued, "When completed, today's actions will remove all of CEOC's 2015 maturities so that CEOC will have no significant maturities until 2016, and we intend to now turn our attention to extending the 2016 and 2017 maturities. Upon completion of the credit facility amendment announced today, CEOC will have added headroom under its maintenance covenant, providing CEOC with additional stability to execute its business plan. Finally, if CEOC successfully lists its equity securities, this independent listing should help facilitate the eventual raising of equity as well as liability management and debt reduction initiatives."