Eldorado/Caesars reveals expected credit facilities, bridge loan terms

By Sara Rosenberg

New York, June 25 – Eldorado Resorts Inc. outlined expected pricing on its $4 billion of credit facilities and bridge loan backing its $1.8 billion of senior unsecured notes due 2028, and on the $2.4 billion seven-year covenant-lite term loan B at Caesars Resorts Collection in the commitment letter filed in an 8-K with the Securities and Exchange Commission on Tuesday.

The Eldorado credit facilities consist of a $1 billion five-year revolver and a $3 billion seven-year covenant-lite term loan B.

Based on the commitment letter, pricing on the Eldorado revolver is expected at Libor plus 325 basis points with a 0% Libor floor and a 50 bps commitment fee, and pricing on the term loan B is expected at Libor plus 350 bps with a 0% Libor floor. Revolver pricing can range from Libor plus 250 bps to 325 bps based on net total leverage.

Pricing on the Caesars term loan B is anticipated to be Libor plus 325 bps with a 0% Libor floor.

The Eldorado and Caesars term loan Bs are expected to have 101 soft call protection for six months.

Meanwhile, the $1.8 billion senior unsecured bridge loan backing the notes is priced at Libor plus 475 bps with a 0% Libor floor. The spread increased by 50 bps every three months until a specified cap is reached.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. are the joint lead arrangers on the Eldorado credit facilities and the bridge loan, with JPMorgan the agent.

Credit Suisse, JPMorgan and Macquarie are the joint lead arrangers on the Caesars Resorts term loan B, with Credit Suisse the agent.

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

Caesars’ existing $1 billion revolver, $4.6 billion term loan B due 2024 and $1.7 billion senior notes due 2025 are expected to remain in place.

Other funds for the transaction will come from $3.2 billion from VICI Properties to fund its acquisition of land and real estate assets associated with Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City and modify certain provisions of the existing Caesars lease agreements, $385 million from announced asset sales proceeds and cash on hand.

Under the agreement, Eldorado will acquire all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 of a share of Eldorado common stock for each Caesars share of common stock.

The total consideration is about $17.3 billion, comprised of $7.2 billion in cash, around 77 million Eldorado common shares and the assumption of Caesars’ outstanding net debt, excluding face value of the existing convertible note.

Post transaction, Eldorado shareholders will hold about 51% of the combined company and Caesars shareholders will own about 49%.

Closing is expected in the first half of 2020, subject to approval of the stockholders of Eldorado and Caesars, the approval of applicable gaming authorities, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary conditions.

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

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