Eldorado-Caesars merger financing to include $6 billion of junk; pricing this week

By Paul A. Harris

Portland, Ore., June 17 – A merger deal that sees Eldorado Resorts, Inc. acquiring Caesars Entertainment Corp. will include $6,005,000,000 of junk bonds to be issued via special purpose vehicle Colt Merger Sub, Inc., and set to price by the end of the week, according to market sources.

The deal has Caesars offering $1.05 billion of five-year senior secured notes, non-callable for two years, with initial talk in the high 5% area to 6%.

Credit Suisse Securities (USA) LLC is the left lead bookrunner. J.P. Morgan Securities LLC, Macquarie, BofA Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc. and CFGRPI are the joint bookrunners.

Meanwhile Eldorado is offering $3.08 billion of five-year senior secured notes, non-callable for two years, with initial talk in the low-to-mid 6% area and $1.875 billion of seven-year senior unsecured notes, non-callable for three years, with initial talk in the mid-to-high 8% area.

JPMorgan is leading the Eldorado tranches.

Proceeds will be used to help fund the acquisition of Caesars by Eldorado.

Under the agreement, Eldorado will acquire all of the outstanding shares of Caesars for $8.40 per share in cash consideration and 0.0899 of a share of Eldorado common stock for each Caesars share.

Closing is expected in mid-2020.

Caesars is a Las Vegas-based gaming and entertainment company. Eldorado is a Reno, Nev.-based gaming company. Upon completion of the transaction, the combined company will retain the Caesars name and be based in Reno.

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