Caesars Entertainment Corp. has been making the headlines recently and it seems like the setbacks the company is experiencing are not going to end anytime soon.
Lenders of Caesars have just informed the media that the company failed in reaching an agreement with the senior bondholders.
People with knowledge of company’s affairs are familiar with the fact that Caesars’ managers were discussing the alternatives for a reconstructing project for Caesars Entertainment Operating Co.
Yesterday, bank lenders and bondholders provided detailed information about the discussions, concerning the debt-restructuring project. They were eligible to do that after Dec.10th when the confidentiality agreement expired.
The latest action of the bondholders was considered to be a well-though-out one as it indicated the end of the discussions and enabled the lenders to trade the debt of the company. They are not obliged to keep the outcome of the talks confidential.
The committee arranged by the first-lien lenders announced that an oral agreement has been reached. However, the deal will be signed only if the company and the bondholders settle down around an agreement that would be sensible and therefore accepted by the lenders. Unfortunately, such an agreement has not been signed yet.
According to the information released by a respected source, Caesars Entertainment and the senior bondholders have reached a trial agreement. The reconstructing project has been given the green light and it is supposed to start before January when the deadline for interest payment was set.
Gary Thompson, the spokesman of Caesars, was not willing to give an immediate comment on the situation.
The financial issues Caesars is experiencing are well known and the company has even been involved in legal issues. Caesars has a huge debt, amounting to $25 billion and a few months ago, company’s representatives announced that there is a chance for the property to close doors for visitors unless a plan for saving the venue is established and the creditors are satisfied.
Almost a month ago, company announced that actions towards remedying the situation had been taken and Caesars was in early talks with noteholders. Their idea was splitting the unit into REIT and an operating company. In this case, the noteholders were supposed to receive almost 94% of the sum they have previously granted to Caesars.
However, things went in a wrong direction, when, a few days later, Caesars announced that the discussions are to be continued due to unexpected new proposals.
The two corporations responsible for the greatest part of company’s debt are Pacific Investment Management Co and Elliott Management Corp.
