Caesars Unit Said to Seek $1.2 Billion in Loans for Casino DealSridhar Natarajan
An affiliate of Caesars Entertainment Corp., the most indebted casino operator, is seeking $1.2 billion in loans to purchase four casinos from the parent’s operating company.
Caesars Growth Properties Holdings LLC is offering to pay 5.75 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark on a seven-year, first-lien term loan, according to a person with knowledge of the matter, who asked not to be identified because they’re not authorized to speak about it. The deal is being arranged by Credit Suisse Group AG.
The unprofitable Caesars Entertainment is selling the casinos to its affiliate for about $2.2 billion, according to a March 3 statement. The proceeds, which will be used to pay down debt, may help the company carry out amendments to its credit agreement and lower its interest expense, according to a a report earlier this month from debt-research firm CreditSights Inc.
The sale includes the Bally’s, Quad and Cromwell casino-hotels in Las Vegas, as well as Harrah’s New Orleans, to Caesars Growth Partners.
Caesars Growth Partners was created last year to aid in debt reduction with the parent company owning 58 percent. Caesars Growth also holds the company’s online gambling operations.
The loan is being offered at a 1-cent discount to par, reducing proceeds for the company, and increasing yield for lenders. Credit Suisse has arranged for a bank meeting on March 27 and commitments are due by April 8, according to the person.