\nCaesars Entertainment Corp. (CZR), controlled by Apollo Global Management LLC and TPG Capital, will have to restructure its debt and may leave some unsecured debt holders with nothing, Moody\u2019s Investors Service said.<\/p>\n
\tThe Las Vegas-based company has been transferring some of its properties from Caesars Entertainment Operating Co., which owes most of the company\u2019s almost $23 billion in debt, to related entities in order to raise cash. Still, the company, the largest owner of casinos in the U.S., will burn through $1 billion this year and $2 billion in 2015, Peggy Holloway, a senior credit officer for Moody\u2019s, said in a report today.<\/p>\n
\tEven if Caesars used the proceeds from recent asset sales to repurchase some debt at 50 cents on the dollar, the company won\u2019t generate enough earnings before interest, taxes, depreciation and amortization to cover remaining interest expenses and capital spending needs, Holloway said.<\/p>\n
\t\u201cRecent asset sales by Caesars\u2019 private equity sponsors are weakening the hand that creditors will bring to the table in the casino company\u2019s inevitable restructuring,\u201d Holloway said, referring to Apollo and TPG. \u201cThe transactions are reducing the asset base underlying the debt, which will likely lead to deeper losses for lenders and bondholders upon a default.\u201d<\/p>\n
\tMoody\u2019s rates Caesars\u2019 long-term debt as Caa3, nine levels below investment grade.<\/p>\n
\tStephen Cohen, a spokesman for Caesars, declined to comment.<\/p>\n
\tDebt Load<\/p>\n
\tCaesars has been struggling under the debt load taken on in a $30.7 billion leveraged buyout led by Apollo and TPG in 2008. Since then gambling revenue has declined in some of the company\u2019s largest markets such as Atlantic City, New Jersey, and Tunica, Mississippi.<\/p>\n
\tThe price of Caesars\u2019 $3.6 billion of 10 percent, second-lien notes due 2018 decreased 0.375 cents on the dollar to 44.625 cents at 4:21 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That\u2019s down from 64 cents last May and higher than the record low of 41.50 cents on March 20.<\/p>\n
\tThe shares, which rose 4.4 percent to $19.14 at the close in New York today, have declined 11.1 percent this year.<\/p>\n
No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"
Caesars Entertainment Corp. (CZR), controlled by Apollo Global Management LLC and TPG Capital, will have to restructure its debt and may leave some unsecured debt holders with nothing, Moody\u2019s Investors Service said. The Las Vegas-based company has been transferring some…<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7354","post","type-post","status-publish","format-standard","hentry","category-latest-casino-news"],"_links":{"self":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/comments?post=7354"}],"version-history":[{"count":0,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7354\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/media?parent=7354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/categories?post=7354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/tags?post=7354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}