Caesars announces recapitalization plan, ends softer; Toys ‘R’ Us firms on investor call

By Stephanie N. Rotondo

Phoenix, May 7 – The distressed debt market was focusing on Caesars Entertainment Corp. on Wednesday as the casino operator not only released earnings, but also announced a recapitalization plan that will strip guarantees from some of its debt.

Not surprisingly, the recap plan put pressure on most of the company’s debt, though there were a couple issues that managed to gain ground.

Bondholders are already decrying the company’s sale of four properties to its Caesars Growth Partners affiliate, alleging that it is a fraudulent transfer that strips assets from the opco.

The bondholders also claim that the opco is insolvent.

Meanwhile, Toys ‘R’ Us Inc. bonds pushed up after the retailer held a lender/creditor conference call on Wednesday. The call was to discuss the company’s fourth-quarter results, which were previously released at the end of March.

With its earnings coming up, NII Holdings Inc. bonds were seen trading mixed.

A trader said the 7 5/8% notes due 2021 rose half a point to 29½. But both the 10% notes due 2016 and the 8 7/8% notes due 2019 were weaker, at 36 and 43¾, respectively.

The trader deemed the latter two issues down almost a point.

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