Caesars Entertainment is getting more support from pro-bankruptcy creditors after BlackRock sold around $500 million of first-lien bonds.
The report indicated that Caesars Entertainment has been discussing with creditors regarding the bankruptcy of Caesars Entertainment Operating Company (CEOC).
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The casino operator has a deadline until January 12 to sign at least 60% or $3.8 billion of first-lien investors to its restructuring plan for CEOC. The terms were part of Caesars agreement with investors including Elliott Management and Pacific Investment Management Company (PIMCO).
Caesars close to getting enough support
Caesars need the support of at least two-thirds of its bondholders to be able to gain a court approval for its bankruptcy related reorganization proposal.
The transaction between BlackRock and pro-bankruptcy creditor group allowed Caesars to move closer to its goal, according to people familiar with the matter. By the end of December Caesar already signed in 39% of first-lien bonds.
Yesterday, Caesars announced that it already receive the support of investors that collectively own or will own 55% of the first-lien bond claims.
In a statement, Gary Loveman, chairman and CEO of Caesars Entertainment said, “We are pleased with the early support of our creditors as we move forward in implementing our previously announced restructuring plan to strengthen CEOC’s financial condition and better position the Company for future growth, investment and success.”
Caesars restructuring plan
Caesars Entertainment entered an all-stock merger agreement Caesars Acquisition Company (CAQQ) to support its restructuring plan for CEOC. Under the reorganization plan, CEOC will voluntarily file for chapter 11 bankruptcy in the middle of January 2015. It will significantly reduce its debt from $18.4 billion to about $8.6 billion. Its annual interest payment will be cut to around $450 million from $1.7 billion.
According to DealBook, BlackRock left the negotiation table before the restructuring plan was signed by bond holders in December based on information familiar with the matter.
The media entity obtained a video recording indicating that TPG Capital is expecting BlackRock to return to the table. TPG’s lawyer Clibe Bode was heard saying in the recording, “The big one that’s outstanding is BlackRock. The indications are BlackRock’s coming in.”