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Caesars Entertainment Said to Boost Rates on Debt Refinancing

Sept. 27 (Bloomberg) -- Caesars Entertainment Corp., the largest owner of U.S. casinos, increased the interest rates on the loans and bonds it’s seeking to refinance debt, according to a person with knowledge of the matter.

The company’s $2.5 billion term loan will pay interest at 6 percentage points more than the London interbank offered rate, with a 1 percent minimum on the benchmark, said the person, who asked not to be identified because the terms are not set. Caesars was marketing the debt at 5.5 percentage points more than Libor.

It’s $1 billion of first-lien, eight-year notes will yield 8 percent, which is more than the 7.25 percent to 7.5 percent it was seeking to pay, and the interest on $1.15 billion of second-lien notes has been increased to 11 percent from 10.25 percent to 10.5 percent, the person said.

The most indebted gaming company, which is controlled by Apollo Global Management LLC and TPG Capital, shuffled the structure of its deal after initially planning to borrow $3 billion in loans, $500 million of first-lien notes and $1.35 billion second-lien debentures.

Proceeds will be used to refinance commercial mortgage-backed securities and a $450 million senior-secured facility, according to a Sept. 18 regulatory filing.

Caesars is selling at least 10 million new shares in addition to the debt with the option for Credit Suisse Group AG to buy 1.5 million additional shares, according to a filing yesterday.

The Las Vegas-based casino owner is also seeking a $269.5 million revolving credit facility. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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