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October 31, 2014

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Caesars selling 4 casinos for $1.8 billion in debt restructuring

Image

Steve Marcus

A view of the front of Bally’s on Sunday, Nov. 17, 2013.

Updated Monday, March 3, 2014 | 10:23 a.m.

Caesars Entertainment Corp. is selling four properties to a separate unit that it controls for about $1.8 billion as it restructures its debt.

The sale of Bally's Las Vegas and the other three properties is valued by the company at about $2.2 billion, when debt and renovations at the Quad Resort & Casino are included. The other assets include Harrah's New Orleans, and The Cromwell, which will open later this year and was formerly known as Bill's Gamblin' Hall & Saloon.

Caesars Acquisition Co. expects the deal to close in the second quarter. Caesars Entertainment will manage the properties.

The deal prompted Moody's Investors Service to put Caesars Entertainment Operating Company Inc.'s ratings on review for downgrade. The rating agency said the sale by its parent company will provide the company with the cash it needs to fund its operating losses, but is an overall negative move for its credit profile.

Moody's said given Caesars Entertainment Operating Co.'s total debt load of nearly $21 billion, there needs to be a major reduction of debt to offset the lost income from the properties.

Caesars Entertainment Corp. said Monday that it expects a deeper net loss of between $1.7 billion and $1.82 billion in the fourth quarter on about $2.05 billion to $2.11 billion in revenue.

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