Harrah's gets tenders for almost $6 billion securities in offers

By Angela McDaniels

Tacoma, Wash., April 9 - Harrah's Entertainment, Inc. announced the final results of the private exchange offers by Harrah's Operating Co., Inc. to exchange new 10% second-priority senior secured notes due 2018 for 12 series of outstanding securities.

It also announced the results of Harrah's BC, Inc.'s tender offer for old notes with an acceptance priority level of 2 that participated in the exchange offers and the retail cash tender offers made by Harrah's Operating to noteholders who were not eligible to participate in the exchange offers.

The offers expired at midnight ET on April 8, according to a company news release.

As of the expiration date, $5.45 billion principal amount of old notes had been tendered in exchange for new notes, $522.94 million principal amount of priority 2 notes had been tendered under Harrah's BC's offer and $23.95 million principal amount of notes had been tendered under the retail cash tender offers.

Harrah's Entertainment said that based on the principal amount of old notes tendered, about $3.4 billion principal amount of new notes will be issued, about $97 million in cash will be paid to holders who validly tendered notes in the Harrah's BC tender offers and about $4.8 million in cash will be paid to holders who tendered notes in the retail cash tender offers.

Specifically, the company received tenders from holders of:

• $86.80 million of its 5½% senior notes due 2010, $85.58 million of which was under the exchange offer and $1.23 million of which was under the retail cash tender offer;

• $44.19 million of its 7 7/8% senior subordinated notes due 2010, $44 million of which was under the exchange offer and $188,000 of which was under the retail cash tender offer;

• $1.44 million of its 8% senior notes due 2011, $1.35 million of which was under the exchange offer and $87,000 of which was under the retail cash tender offer;

• $47.09 million of its 8 1/8% senior subordinated notes due 2011, $46.64 million of which was under the exchange offer and $444,000 of which was under the retail cash tender offer;

• $66.23 million of its 5 3/8% senior notes due 2013, $65.69 million of which was under the exchange offer and $544,000 of which was under the retail cash tender offer;

• $274.13 million of its 5 5/8% senior notes due 2015, $57.32 million of which was under the exchange offer, $201.92 million of which was under the Harrah's BC tender offer and $14.89 million of which was under the retail cash tender offer;

• $267.17 million of its 6½% senior notes due 2016, $74.50 million of which was under the exchange offer, $189.12 million of which was under the Harrah's BC tender offer and $3.56 million of which was under the retail cash tender offer;

• $202.95 million of its 5¾% senior notes due 2017, $68.88 million of which was under the exchange offer, $131.90 million of which was under the Harrah's BC tender offer and $2.16 million of which was under the retail cash tender offer;

• $1.10 billion of its 10¾%/11½% senior toggle notes due 2018, all of which was under the exchange offer;

• $3.46 billion of its 10¾% senior notes due 2016, of which $850,000 was under the retail cash tender offer and the remainder was under the exchange offer;

• $99.67 million of its 10¾%/11½% senior toggle bridge loan due 2018, all of which was under the exchange offer; and

• $342.58 million of its 10¾% senior bridge loan due 2016, all of which was under the exchange offer.

Because it received consents from lenders holding more than 50% of the bridge loans, Harrah's Operating's loan agreement will be amended to allow it to buy back bridge loans from time to time at prices below par from specific lenders in the form of voluntary prepayments.

Harrah's Operating will issue about $297 million new notes for about $442 million principal amount of bridge loans surrendered in the interim loans exchange offer, according to the release.

Harrah's Entertainment and Harrah's Operating expect the settlement date for the offers will be April 15.

More repurchases possible

Following the settlement date, the companies may from time to time seek to retire or purchase Harrah's Operating's outstanding debt through cash purchases or exchanges in open-market purchases or privately negotiated transactions.

As previously reported, Harrah's did not publicly release all the terms of the offers, saying they were contained in a confidential offering memorandum.

On March 26, Harrah's increased the amount of new 10% notes that will be issued in exchange for the 5 3/8% notes to $500 of new notes per $1,000 principal amount of existing notes. Holders had to tender by the early tender deadline, which was 5 p.m. ET on March 25, to receive this consideration in full.

The offer was also amended so that for the priority 3 notes, all holders who tendered by the expiration will receive the full consideration, whether they tender before or after the early deadline.

The purchase price in the offer for the priority level 2 notes was increased to $185 per $1,000 principal amount for those who tendered by the early deadline.

Meanwhile, the cash payment in the retail offer for the notes was also raised to $185 per $1,000 principal amount. This sum was on offer for all who tendered by the expiration, whether they tendered before or after the early deadline.

The offers were not conditioned on a minimum principal amount of old notes being tendered or the issuance of a minimum principal amount of new second-lien notes.

Global Bondholder Services Corp. (866 736-2200 or collect 212 925-1630) was the information agent.

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.