Caesars overhauls up to $5.25 billion refinancing now in the bond and bank loan markets

By Paul A. Harris

Portland, Ore., Sept. 26 - Caesars Entertainment Resort Properties, LLC overhauled up to $5.25 billion of bond and bank financing currently in the market and set price talk on Thursday, according to a syndicate source.

The bond portion of the financing is increased to a range of $2.25 billion to $2.75 billion from a previous overall size of $1.85 billion.

The bond financing includes an upsized $1 billion to $1.5 billion of seven-year first-lien notes (B2/B), which are non-callable for three years and are talked to yield 7¼% to 7½%. The first-lien notes tranche is upsized from $500 million.

A downsized $1.25 billion tranche of eight-year second-lien notes (Caa2/CCC+), which is non-callable for three years and is talked to yield 10¼% to 10½%. The second-lien notes tranche was downsized from $1.35 billion.

The company also downsized its first lien term loan to a range of $2 billion to $2.5 billion from $3 billion.

Books for the bond offer close at the close of business on Thursday. Commitments for the term loan are due at noon ET on Friday.

Terms are expected thereafter.

Citigroup Global Markets Inc., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co., Macquarie, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint bookrunners for the Rule 144A and Regulation S bonds.

Proceeds, along with $100 million of proceeds from a 10 million share offering of common stock from Caesars Entertainment Corp., will be used to help refinance about $4.4 billion of CMBS debt and the $450 million senior secured credit facility entered into by Octavius Linq Holding Co. LLC, an indirect subsidiary of Caesars.

Caesars is a Las Vegas-based diversified casino-entertainment company.

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