Tags: Caesars | casino | bankruptcy | Las Vegas

Caesars Amends Debt Contract Paving Way for January Bankruptcy

Friday, 17 Oct 2014 10:57 AM

Caesars Entertainment Corp.’s operating unit amended a debt document so senior bondholders would get a lien on the casino operator’s cash as it negotiates a restructuring of $18.3 billion of debt, according to a filing Thursday with the U.S. Securities and Exchange Commission.

The move may raise the odds that the Las Vegas-based company files for a bankruptcy as soon as mid-January. A transfer of assets, including a pledge on cash, would have to be done at least 90 days before a Chapter 11 filing.

“The first-lien lenders want to protect themselves in bankruptcy,” Chris Snow, a New York-based analyst at researcher CreditSights Inc., said. By doing this, “the company is saying it needs to grant the liens on this cash in order to move” debt talks “forward,” he said.

Gary Thompson, a spokesman at Caesars, declined to comment.

We “do not expect that our cash flow from operations will be sufficient to repay our indebtedness in the long-term and we will ultimately seek a refinancing, amendment, or restructuring of our debt,” the company said in an Aug. 11 filing.

Caesars’ $4.5 billion of 10 percent, second-lien notes due December 2018 have $225 million in interest payments Dec. 15, a cash outlay other creditors don’t want leaving the company. When a company misses an interest payment, it has a 30-day grace period before it’s in default.

The casino operator is in discussions with first-lien bondholders Pacific Investment Management Co., Elliott Management Corp., Beach Point Capital Management LP, BlackRock Inc., Brigade Capital Management LLC, and JPMorgan Asset Management Inc., people with knowledge of the talks said last month.

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Caesars Entertainment's operating unit amended a debt document so senior bondholders would get a lien on the casino operator's cash as it negotiates a restructuring of $18.3 billion of debt.
Caesars, casino, bankruptcy, Las Vegas
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2014-57-17
Friday, 17 Oct 2014 10:57 AM
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