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Talk surfaces in Caesars-Eldorado’s $6.2 billion three-part junk bonds; pricing Friday
By Paul A. Harris
Portland, Ore., June 19 – Price talk surfaced on Friday on the upsized Colt Merger Sub, Inc. $6.2 billion three-part junk bond deal backing the acquisition of Caesars Entertainment Corp. by Eldorado Resorts, Inc., according to market sources.
The Caesars Entertainment portion of the deal, an offering of five-year secured notes that are non-callable for two years, (B1/B+) was downsized to $1 billion from $1.05 billion and talked to yield 5¾% to 6%, in line with earlier guidance in the high 5% area to 6%.
The Eldorado portion of the bond financing is upsized to $5.2 billion from $4.995 billion.
It features an upsized $3.4 billion tranche of five-year secured notes that are non-callable for two years (B1/B). The notes are talked to yield 6¼% to 6½%, in line with early guidance in the low-to-mid 6% area and upsized from $3.08 billion.
The Eldorado portion also includes a downsized $1.8 billion tranche of seven-year unsecured notes that are non-callable for three years (Caa1/CCC+) talked to yield 8¼% to 8½%, tight to early guidance in the mid-to-high 8% area and downsized from $1.875 billion.
The overall bond portion of the financing is upsized to $6.2 billion from $6.005 billion.
Pricing is set for Friday.
Credit Suisse Securities (USA) LLC is the lead on the Caesars notes offering.
J.P. Morgan Securities LLC is the lead on the Eldorado tranches.
The other joint bookrunners for both tranches are Macquarie, BofA Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc. and Citizens Capital Markets Inc.
Proceeds will be used to help fund the acquisition of Caesars by Eldorado.
Closing of the acquisition 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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