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S&P lifts, rates Caesars and subsidiaries
S&P said it raised its corporate credit ratings on Caesars Entertainment Corp. (CZR), Caesars Growth Properties Parent LLC (CGPP), Caesars Entertainment Resort Properties and Chester Downs and Marina LLC to B+ and removed the ratings from CreditWatch, where they were placed with positive implications on Jan. 24.
The agency also assigned Caesars Growth Properties Holdings LLC (CGPH) a B+ corporate credit rating and affirmed the B+ corporate credit rating on Caesars Entertainment Operating Co. LLC.
The outlooks are positive.
At the same time, S&P assigned CGPH's proposed $5.7 billion senior secured credit facility, consisting of a $1 billion revolver due 2022 and a $4.7 billion term loan due 2024, a BB issue-level rating and 1 recovery rating, reflecting an expectation for very high recovery (90%-100%; rounded estimate: 90%) for lenders in the event of a payment default.
The agency also assigned its B- issue-level rating to CGPH's proposed $1.7 billion senior unsecured notes due 2025. The 6 recovery rating reflects an expectation for negligible recovery (0% to 10%; rounded estimate: 0%) for lenders in the event of a payment default.
S&P removed all issue-level ratings from CreditWatch with positive implications and raised the corporate credit rating on Corner Investment Propco to B+ and removed it from CreditWatch, and then subsequently withdrew it at the issuer's request.
“The B+ rating on CZR and all current and anticipated subsidiaries (including CGPP and CGPH) reflects our expectation that CZR's consolidated leverage will improve to around 6x in 2018 from the high-6x area at the end of 2017, through a combination of EBITDA growth in 2018 and an expectation that the company will generate free cash flow that could be used for debt repayment,” the agency said in a news release.
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