Caesars Entertainment begins tender offers for 5 5/8% notes, 10% notes

By Angela McDaniels

Tacoma, Wash., May 6 - Caesars Entertainment Corp. subsidiary Caesars Entertainment Operating Co., Inc. began tender offers for its $791,767,000 outstanding principal amount of 5 5/8% senior notes due 2015 and its $214.8 million outstanding principal amount of 10% second-priority senior secured notes due 2015, according to a company news release.

The company noted that a subsidiary of Caesars Growth Partners, LLC, an affiliate of the issuer, holds $427,319,000 principal amount of the 5 5/8% notes.

For each $1,000 principal amount of notes tendered, the company will pay $1,048.75 for the 5 5/8% notes and $1,022.50 for the 10% notes. Each of these payments includes an early tender payment of $30.00 for each $1,000 principal amount of notes tendered by the early tender time, 5 p.m. ET on May 19.

The company will also pay accrued interest up to but excluding the payment date, which is expected to be June 4.

The tender offers will expire at midnight ET at the end of June 3.

In connection with the tender offers, on May 5, the issuer entered into note purchase agreements with a third-party holder and a subsidiary of Caesars Growth Partners to purchase from the selling holders $746.4 million principal amount, or 94.3%, of the 5 5/8% notes for a purchase price of $1,048.75 per $1,000 principal amount and $108.7 million principal amount, or 50.6%, of the 10% notes for a purchase price of $1,022.50 per $1,000 principal amount plus, in each case, accrued interest up to but excluding the closing date.

In addition, the issuer is seeking a $1.75 billion incremental term loan. The proceeds will be used to retire existing debt, including the 5 5/8% notes and 10% notes, and to provide additional liquidity.

Among other things, the tender offers are conditioned on the issuer receiving enough proceeds from the incremental term loan to refinance all of its existing debt that matures in 2015, including the 5 5/8% notes and 10% notes.

Caesars Growth Partners has agreed to reinvest all of the proceeds received from the repurchase of notes held by its subsidiary in the incremental term loan.

The dealer manager is Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106). The information agent is Global Bondholder Services Corp. (212 430-3774 for brokers and banks or 866 470-4500 for others).

Caesars is a casino-entertainment company based in Las Vegas.

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