Caesars will talk with bank creditors to address debt

Caesars Entertainment Corp. said Friday it would begin talks with bank creditors to rework part of its $24.2 billion debt.

The move follows a similar announcement last month in which the Las Vegas-based coasino operator said it was in discussions with its senior bond holders in efforts to restructure the largest portions of what has become the highest debt in the gaming industry.

The announcement was viewed positively by stockholders, who are hopeful a settlement at the negotiating table between Caesars and its creditors would keep the company out of bankruptcy court.

Shares of Caesars, traded on Nasdaq, closed at $11.71 Friday, up $1.32, or 12.7 percent.

One analyst, however, believes Caesars — which operates more than 50 casinos in the United States, including nine on or near the Strip — still will have to go through a bankruptcy court-monitored reorganization to fix the company’s balance sheet.

Fitch Ratings Service gaming analyst Alex Bumazhny said earlier this year Caesars’ debt was “unsustainable.”

In a phone interview from New York on Friday, Bumazhny said “it was likely” that the company would have to resolve its issues through bankruptcy.

He said “there were too many stakeholders” involved for the talks to be successful.

“The forces are not seeing eye-to-eye,” Bumazhny said. “We just don’t see how this gets resolved.”

He said the company is “burning through $1 billion a year in cash flow.”

MAKING PROGRESS

In a statement Friday, Caesars Chairman Gary Loveman said the talks with the banks could “create a path toward a sustainable capital structure” for the company.

Caesars said it “executed nondisclosure agreements” with the banks.

Loveman told the Las Vegas Review-Journal in September the company “had made progress” with its unsecured creditors and talks with the first lien holders “was an important step” in moving forward with healing the company’s balance sheet.

In a Thursday filing with the Securities and Exchange Commission, Caesars said it amended a debt document so senior bondholders would get a lien on the casino operator’s cash.

“These steps are just part of a long march to a likely late-in-the-year restructuring announcement,” KDP Investment Advisors gaming analyst Barbara Cappaert said. “It appears that first lien creditors are the focus of the discussions for now.”

Chris Snow, a New York-based analyst at researcher CreditSights Inc., told Bloomberg News 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,” Snow told Bloomberg News.

Earlier this month, Caesars said it received a notice of default from a group of second-lien holders covering $3.7 billion of the company’s debt. The company said it was “reviewing the notice.”

SECOND NOTICE OF DEFAULT

On Friday, Caesars said in an SEC filing that it received a second notice of default from bond holders claiming to own 30 percent of another portion of the company’s debt.

Bumazhny believes there were too many differences between the first- and second-lien bond holders and the company to resolve the balance sheet issues.

Caesars announced an overall restructuring plan in May that eliminated more than $1 billion in debt that was due next year while providing a different ownership structure to pieces of the company. The company recently raised $1.75 billion in new debt associated with 2015 debt retirement, as well paying down $800 million of debt due in 2016.

The company also installed new management into Caesars Entertainment Operation Co., or CEOC, which operates 44 casino properties in 13 states — the largest chunk of the company’s operating divisions. CEOC owns Caesars Palace, Caesars Atlantic City, Harrah’s Reno and many of the company’s regional properties.

Casinos and properties held under CEOC owe roughly 80 percent of the company’s overall debt.

Caesars’ other major operating division is Caesars Growth Partners, which is publicly traded on the Nasdaq as Caesars Acquisition Co. The business, which is 57 percent owned by Caesars Entertainment, includes The Cromwell, The Quad, Bally’s Las Vegas, Planet Hollywood, Harrah’s New Orleans, a 41 percent interest in Horseshoe Baltimore and Caesars Interactive Entertainment.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

ad-high_impact_4
Business
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like