Caesars Bond Rises to Three-Year High as Bankruptcy Deal Nears

Some of Caesars Entertainment Corp.’s bonds rose to the highest level in more than three years after the gaming giant said it made “significant progress” toward an agreement that would lift its operating unit out of bankruptcy. 

The company’s $760.4 million of 10 percent second-lien notes maturing 2018 increased 1.5 cents to trade at 62.25 cents on the dollar at 12:14 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That’s the highest since April 2013.

Caesars said Monday that discussions are continuing with major creditors and the company is optimistic about reaching an agreement, according to a company statement. A deal would allow Las Vegas-based Caesars to end two years of court battles that embroiled the firm and its controlling shareholders, Apollo Global Management LLC and TPG Capital.

The second-lien debt holders, a group that includes Appaloosa Management, have been the toughest holdouts in the restructuring talks since the operating unit filed for bankruptcy in January 2015. The creditors have been seeking a higher payout after the Las Vegas-based Caesars originally offered about $4 billion toward the reorganization. 

The latest plan the company announced last week would add about $1.6 billion for these investors, bringing the recovery to 65.6 cents for the second-lien holders. Other lenders and bondholders that would have to give up a portion of their recoveries pushed back late last week. The stakeholders must determine how to divide a $400 million payout called for in a new plan the company offered last week, people familiar with the matter said at the time.