Harrah's launches $750 million incremental term loan, sets talk

By Sara Rosenberg and Paul A. Harris

New York, Sept. 22 - Harrah's Operating Co. Inc. held an investor call at 10 a.m. ET on Tuesday to launch a $750 million incremental term loan (B-) that has the potential to be upsized, according to a market source.

Price talk on the loan is Libor plus 750 basis points with a 2% Libor floor and an original issue discount in the 97 to 98 area.

For optional redemptions, the loan is non-callable for two years, then at 105 in year three, 103 in year four and par thereafter.

Bank of America and Citigroup are the joint lead arrangers and joint bookrunners on the deal, and JPMorgan, Credit Suisse and Deutsche Bank are also bookrunners.

The loan, due in October 2016, is being obtained under the accordion feature of the company's existing credit facility.

Covenants under the term loan are similar to those under the existing credit facility.

Proceeds will be used to refinance existing debt and to provide additional liquidity. Also, a portion of the net proceeds will be used to fund note tender offers.

Harrah's announced on Tuesday that it is tendering for up to $175 million of its 5.5% senior notes, 7.875% senior subordinated notes, 8% senior notes and 8.125% senior subordinated notes.

The tender offers will expire on Oct. 21.

Harrah's is a Las Vegas-based provider of branded casino entertainment.

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