{"id":235858,"date":"2022-10-05T18:18:19","date_gmt":"2022-10-05T23:18:19","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=235858"},"modified":"2022-10-05T18:47:27","modified_gmt":"2022-10-05T23:47:27","slug":"caesars-moves-to-lighten-debt-load-with-new-credit-facilities","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/","title":{"rendered":"Caesars Trims Interest Expenses with $3B in Fresh Credit Facilities"},"content":{"rendered":"

Caesars Entertainment (NASDAQ: CZR) is making moves to reduce one of the gaming industry\u2019s largest debt burdens, announcing today it procured $3 billion in new senior secured credit facilities maturing in 2028.<\/p>\n

\"Caesars
Caesars Palace Las Vegas. The company is making moves to reduce interest costs. (Image: Getty Images)<\/figcaption><\/figure>\n

Those fresh financing avenues consist of a $750 million senior secured term loan (the “Term A Loan”) and a $2.25 billion senior secured revolving credit facility. The term loan and the credit facility mature in 2028, allowing Caesars to use the capital to pay down liabilities with near-term maturities, and that\u2019s what the casino giant is doing.<\/p>\n

Concurrently with the closing of the Senior Credit Facilities, Caesars retired Caesars Resort Collection, LLC’s (CRC) existing revolving credit facility and used the proceeds of the Term A Loan to prepay $750 million of CRC’s existing term B loans due December 2024,\u201d<\/strong> according to a statement.<\/p><\/blockquote>\n

Caesars CFO Bret Yunker <\/span>said the refinancing \u201cwill reduce interest expense while also extending debt maturities,\u201d<\/strong> though he didn\u2019t not say by how much annual interest costs will fall. The Harrah\u2019s operator worked with a consortium of 16 lenders on the credit facilities.<\/p>\n

Why It Matters for Caesars<\/h2>\n

For Caesars bondholders and equity investors alike, the new credit facilities are relevant for a simple reason: Rising interest rates<\/a> are pinching debt-riddled companies this year, particularly those with non-investment grade ratings.<\/p>\n

A big part of Caesars\u2019 2022 struggles likely boil down to the gaming company\u2019s sizable debt burden, which stands at $13.7 billion. Owing to a junk credit rating, Caesars paid $2.3 billion in interest expense over the past reporting year \u2014 a negative in any environment, but even more so when interest rates are rising.<\/p>\n

\n

Shares of the Horseshoe operator are off almost 59% year-to-date. Since the completion of the merger between Eldorado Resorts and \u201cold Caesars,\u201d new Caesars debt burden was trimmed by $400 million, confirming the new management team is prioritizing reduction of liabilities.<\/p>\n<\/div>\n

That\u2019s crucial, because the gaming company generated $1.3 billion in operating income in the last reporting year, but lost approximately $1 billion largely due to interest expenses. Prior to today\u2019s news of the new credit facilities, analysts forecast<\/a> a decline of $75 million-plus in 2022 interest costs for the casino operator.<\/p>\n

\u201c<\/strong>The interest rate under the Senior Credit Facilities is the forward-looking term rate based on the secured overnight financing rate (Term SOFR) plus an adjustment of 10 basis points, plus an applicable margin of 225 basis points, which applicable margin is subject to three 25 basis point step-downs based on the achievement of certain net total leverage ratios,\u201d according to the statement.<\/p>\n

Other Debt-Reducing Avenues for Caesars<\/h2>\n

Caesars has other ways to reduce liabilities. Namely, it could swiftly pare debt by selling one of its Las Vegas Strip venues — a transaction that could fetch $1 billion<\/a>. That\u2019s a widely expected move, but one the company hasn\u2019t announced yet.<\/p>\n

The operator previously shed properties in smaller markets and hasn\u2019t announced plans to do so in the near- to medium-term.<\/p>\n

Halting losses in its digital gaming unit and boosting margins at land-based casinos are other potential contributors to debt reduction.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ: CZR) is making moves to reduce one of the gaming industry\u2019s largest debt burdens, announcing today it procured $3 billion in new senior secured credit facilities maturing in 2028. Those fresh financing avenues consist of a $750 million senior secured term loan (the “Term A Loan”) and a $2.25 billion senior secured […]<\/p>\n","protected":false},"author":46,"featured_media":235868,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810],"tags":[81903,81898],"acf":[],"yoast_head":"\nCaesars Moves To Lighten Debt Load With New Credit Facilities<\/title>\n<meta name=\"description\" content=\"Caesars can pare debt interest expense with new credit facilities.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Moves To Lighten Debt Load With New Credit Facilities\" \/>\n<meta property=\"og:description\" content=\"Caesars can pare debt interest expense with new credit facilities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-10-05T23:18:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-10-05T23:47:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/CP-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/\",\"name\":\"Caesars Moves To Lighten Debt Load With New Credit Facilities\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/CP-1.jpg\",\"datePublished\":\"2022-10-05T23:18:19+00:00\",\"dateModified\":\"2022-10-05T23:47:27+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars can pare debt interest expense with new credit facilities.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-moves-to-lighten-debt-load-with-new-credit-facilities\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/CP-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/CP-1.jpg\",\"width\":1600,\"height\":900,\"caption\":\"Caesars Palace on the Las Vegas Strip. 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