Hamlet receives tenders for $414.15 million of Harrah's 10% notes

By Angela McDaniels

Tacoma, Wash., May 21 - Harrah's Operating Co., Inc. investors led by Apollo Global Management, LLC and TPG Capital, LP said they received tenders for $414,153,000 of notes during their tender offer for up to $946 million principal amount of Harrah's Operating's 10% second-priority senior secured notes due 2015 and 10% second-priority senior secured notes due 2018.

The offer expired at midnight ET on May 20, pushed back from May 13.

The investors are carrying out the tender offer through Hamlet Tender, LLC and Hamlet FW LLC.

Holders tendered $349,388,000 of notes due 2018 issued in April, $38,118,000 of notes due 2018 issued in December and $26,647,000 of notes due 2015 issued in December.

All the notes were accepted for purchase.

Holders will receive $370 per $1,000 principal amount of notes plus accrued interest to the settlement date, which will be May 22. The total purchase price is about $159 million.

The 10% second-priority notes were issued to holders through an earlier exchange offer held by Harrah's Operating and a tender offer held by Harrah's BC Inc.

When the offer began March 5, the investors were offering to purchase up to $676 million of the notes, and holders who tendered after the early tender date of April 29 were slated to receive $340 per $1,000 principal amount - $30 less than those who tendered before that time.

The offer was later increased to up to $946 million of notes and amended so that all holders who tendered would receive $370 per $1,000 principal amount of notes.

Under an agreement reached May 7, some funds managed by Oaktree Capital Management, LP are funding the purchase of about 16.7% of the notes accepted in the offer. An affiliate of the Oaktree funds is a co-investor in the indirect parent of Harrah's Operating.

Citigroup Global Markets Inc. (800 558-3745 or call collect 212 723-6106) and J.P. Morgan Securities Inc. (800 245-8812 or call collect 212 270-3994) were the dealer managers.

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

Parent company Harrah's Entertainment, Inc. is a Las Vegas-based casino company.

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