Caesars Entertainment Corp. (CZR), the casino operator with $23 billion in obligations, is assessing a proposal from senior bondholders to cut debt at its largest unit, according to three people with knowledge of the talks.
Advisers to a group of first-lien creditors that includes Paul Singer’s Elliott Management Corp. and Bill Gross’ Pacific Investment Management Co. proposed trimming debt in exchange for a mix of new debt, cash and securities that would gain value as the company recovers, according to two of the people, who asked not to be named because talks are private. Investment bank Miller Buckfire & Co. and law firm Kramer, Levin, Naftalis & Frankel LLP are advising the group, the people said.
The offer begins a process that seeks to restructure about $12.7 billion of bonds at Caesars Entertainment Operating Co., the most indebted unit, and keep it out of bankruptcy. Caesars sued more than 30 creditors including Elliott, accusing them today in a statement of impeding the reorganization process.
The casino owner also is negotiating with advisers of a separate group of junior bondholders that would have to agree to a deal, one of the people said. The advisers Jones Day LP and Houlihan Lokey were brought into talks over the weekend with private-equity sponsors Apollo Global Management LLC and TPG Capital and first-lien representatives, the person said.
Gary Thompson, a spokesman for Las Vegas-based Caesars, Stephen Spruiell, a spokesman at Elliott, Lisa Baker, a spokeswoman for TPG at Owen Blicksilver Public Relations Inc., and Charles Zehren, a spokesman for Apollo at Rubenstein Associates, declined to comment. Mark Porterfield, a spokesman at Pimco, didn’t respond to e-mail and telephone messages seeking comment.
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