Caesars Seeks Funding with $1.5bn Bonds and $2bn Term Loan

Caesars Entertainment, a leading hospitality and gaming company, made a significant financial announcement on Wednesday. The company revealed its plans to sell $1.5 billion in bonds, which will be available for qualified institutional buyers in a private placement under Rule 144A of the Securities Act of 1933. The senior secured notes are due in 2032 and will be guaranteed by Caesars’ domestic subsidiaries, pending regulatory approvals.

In addition to the bond sale, Caesars also disclosed its intention to secure a new $2 billion senior secured term loan facility, referred to as the “New Term B-1 Loan,” through an amendment to the existing CEI Credit Agreement. However, the company clarified that the closing of the new loan is not a condition for the sale of the notes.

Caesars stated that the proceeds from the term loan and notes will be used to address current debt obligations, including the 6.250% Senior Secured Notes due 2025, as well as to cover expenses and fees related to the transactions.

The financial move comes after Caesars released preliminary Q4 2023 results, revealing deviations from analysts’ projections. The company estimated that its revenue for the quarter would be between $2.815 billion and $2.835 billion, falling short of the Wall Street prediction of $2.89 billion. Similarly, the projected EBITDA for the period is in the range of $920 million and $940 million, lower than analysts’ expectations of $957 million.

Overall, Caesars Entertainment’s planned sale of $1.5 billion in bonds and the intention to secure a new $2 billion senior secured term loan facility are strategic financial decisions aimed at addressing current debt obligations and managing expenses, following deviations in Q4 2023 financial projections.