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Caesars Entertainment Merges And Restructures Amid Bankruptcy Plans

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Part 5
Caesars Entertainment Merges And Restructures Amid Bankruptcy Plans PART 5 OF 6

Caesars Entertainment Debt Holders Could Recover Their Investment

Senior secured facilities recovery

On December 28, 2014, Caesars Entertainment’s (CZR) entered into an agreement with the creditors of Caesars Entertainment Operating Company (or CEOC), a majority owned subsidiary of CZR, to restructure CEOC’s debt. These creditors of CEOC could recover their investment through a combination of cash and new debt issuances of the restructured entity.

Caesars Entertainment Debt Holders Could Recover Their Investment

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Each lender under CEOC’s senior secured credit facilities will receive its pro rata share of:

  • $705 million in cash
  • $883 million in new first lien operating company debt
  • $406 million of new second lien operating company debt
  • $1,961 million in new first lien property company debt
  • up to $1,450 million in additional cash or CPLV mezzanine debt

First lien notes

Each first lien note holder will receive a pro rata share of:

  • $413 million in cash
  • $306 million in new first lien operating company debt
  • $141 million of new second lien operating company debt
  • $431 million in new first lien property company debt
  • $1,425 million in new second lien property company debt
  • up to $1,150 million in additional cash or CPLV mezzanine debt
  • 9% directly or indirectly of property company equity (or cash under put options and equity rights)
  • 100% of the operating company equity (or cash under put options and equity rights)

Caesars’s responsibility

In order to effectuate the restructuring, CZR has agreed to:

  • contribute $406 million to CEOC with an additional $75 million if there’s insufficient liquidity at closing
  • purchase up to all of the operating company’s equity for $700 million and 14.8% of the property company’s equity for $269 million
  • guarantee the operating company’s monetary obligations to the property company under the leases

CZR is a component of ETFs including VanEck Vectors Gaming (BJK). BJK invests in major casino companies like Las Vegas Sands (LVS), Wynn Resorts (WYNN), and MGM Resorts (MGM).

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