Harrah's tenders for bonds, convertibles

New York, Dec. 21 - Harrah's Entertainment, Inc. said its Harrah's Operating Co., Inc. subsidiary began a tender offer and consent solicitation for five series of debt securities while Harrah's Entertainment and Harrah's Operating began a similar offer for one series of outstanding convertibles.

The tender offers are being conducted in connection with the previously announced acquisition of Harrah's Entertainment by Apollo Global Management, LLC and TPG Capital, LP.

Completion of the tender offers and consent solicitations is not a condition to completion of the merger but the tender offers and consent solicitations are subject to conditions, including satisfaction of the conditions to the acquisition and the receipt of consents from holdings of a majority of each series of the securities.

The securities covered by the tender are the $250 million of senior floating-rate notes due 2008, the $400 million of 8 7/8% senior subordinated notes due Sept. 15, 2008, the $136.294 million of 7½% senior notes due Jan. 15, 2009, the $425 million of 7½% senior notes due Sept. 1, 2009, the $300 million of 7% senior notes due April 15, 2013 and the $375 million of Floating-rate contingent convertible senior notes due 2024.

The consent deadline is 5 p.m. ET on Jan. 7 for the straight debt and the tender ends at 8 a.m. ET on Jan. 23. The consent solicitation for the convertibles also ends at 8 a.m. ET on Jan. 23. Only holders who tender by the consent deadline will receive the consent payment.

The amount on offer is:

• $970 per $1,000 principal amount for the floaters plus a $30.00 per $1,000 consent payment for a total of $1,000 per $1,000 principal amount;

• For the 8 7/8% notes, an amount set using a spread of 50 bps over the 3 1/8% Treasury due Sept. 15, 2008, with the total to include a $30.00 per $1,000 consent payment;

• For the 7½% notes due Jan. 15, 2009, an amount set using a spread of 50 bps over the 3¼% Treasury due Jan. 15, 2009, with the total to include a $30.00 per $1,000 consent payment;

• For the 7½% notes due April 15, 2009, an amount set using a spread of 50 bps over the 4% Treasury due June 30, 2009, with the total to include a $30.00 per $1,000 consent payment;

• For the 7% notes, an amount set using a spread of 50 bps over the 3 3/8% Treasury due Nov. 30, 2012, with the total to include a $30.00 per $1,000 consent payment;

• $1,379.52 per $1,000 principal amount for the convertibles.

Calculations using a reference Treasury will pay the sum of the present value on the payment date of $1,000 at the securities' maturity date plus interest payments, discounted using the bid-side yield on the reference Treasury at 2 p.m. ET on Jan. 8 plus the spread, minus accrued interest up to but excluding the payment date. That total includes the consent payment.

Harrah's will also pay accrued interest up to but excluding the payment date.

Holders who tender will be required to deliver consents to amendments to the indentures that will eliminate or make less restrictive substantially all of the restrictive covenants as well as certain events of default and related provisions in the indentures.

Citi is lead dealer manager (800 558-3745 or call collect 212 723-6106). Global Bondholder Services Corp. is information agent (866 924-2200, banks and brokers call 212 430- 3774).

Harrah's is a Las Vegas-based casino company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.