Harrah's Entertainment plans to issue $500 million in second priority secured notes that are due in 2018, which will be used to pay down loans that come due over the next two years.
In a statement Tuesday, the casino operator said the offering is subject to several conditions.
Soon after the announcement, Moody's Investors Service maintained a "negative" rating outlook toward Harrah's long-term debt.
Moody's said the ratings and outlook anticipate a continued decline in gaming revenues in Harrah's two largest markets, Las Vegas and Atlantic City, which "will negatively impact the company's operating performance in 2010."
In February, gaming revenues in Las Vegas grew almost 33 percent, the largest single-month increase since November 1999. Meanwhile, Atlantic City gaming revenues fell 5.6 percent, the 19th straight monthly decline.
Bloomberg News reported that Harrah's notes have surged to their highest interest levels since the Las Vegas-based casino giant was acquired by private equity firms Apollo Management LP and TPG for $30.7 billion in January 2008.
The company averted a potential default after cutting $4.2 billion of debt by offering creditors new bonds at a discount. Last month, Harrah's lenders agreed to extend $5.5 billion of maturities to 2015 and repurchased mortgages at below face value.
Harrah's Entertainment has total debt of roughly $20 billion.
"They've done a good job clearing out near-term maturities and have tackled the major debt payment threats coming due until 2014," Chris Snow, an analyst at debt-research firm CreditSights Inc. in New York, told Bloomberg News.
"Bondholders were asked to accept less than par for the sake of Harrah's solvency."
Contact reporter Howard Stutz at email@example.com or 702-477-3871.