Caesars Entertainment ( CZR) shares fell 3.7% as investors feared the dilutive affects of the casino operator's $300 million convertible note offering. Caesars Tuesday announced it was selling $300 million in debt due 2024, which has a floating rate and can be converted into cash and stock under certain circumstances. The debt sale, which has yet to be priced, has an overallotment of $75 million. Shares, which opened the day 5 cents below a 52-week high, were down 50 cents to $13.19 in late morning trading on 1.7 million shares, heavier than its average daily volume of 1.4 million shares. The company said that proceeds from the offering will be used to "repay a portion of amounts outstanding under its existing bank credit facilities." Like many smaller casinos , the company is taking advantage of the low interest rate environment to pay off debt incurred during its ongoing renovation of its portfolio of properties. At the end of fiscal 2003, Caesars had $1 billion in current liabilities and a total of $6.7 billion in total liabilities. Elsewhere, Caesars announced that a member of its board, Ralph Ferrara, a managing partner of the law firm Debevoise & Plimpton, had resigned just eight months after being named to the board of directors. Ferrara, a former general counsel of the Securities and Exchange Commission, cited "personal reasons" in leaving the company.