Harrah's plans new credit facility for LBO by Texas Pacific, Apollo

By Sara Rosenberg

New York, Dec. 20 - Harrah's Entertainment Inc. is planning on getting a new credit facility to help back its leveraged buyout by Texas Pacific Group and Apollo Management, LP, according to a market source.

Under the transaction agreement, Texas Pacific and Apollo are buying Harrah's for $27.8 billion, including the assumption of $10.7 billion of debt.

Estimated debt to EBITDA following the LBO will be around 8.0 times, compared to pre-LBO debt to EBITDA of 4.7 times, according to a DEFA14A filed with the Securities and Exchange Commission Wednesday.

The transaction is expected to be completed in about one year and is subject to stockholder approval, regulatory approvals and customary closing conditions. It is not subject to a financing condition.

Deutsche Bank Securities is serving as lead financial adviser to Apollo and TPG. Banc of America Securities LLC, Citigroup Corporate and Investment Banking, Credit Suisse Securities LLC, JPMorgan, and Merrill Lynch & Co. are also serving as financial advisers to the investors.

Harrah's is a Las Vegas-based provider of branded casino entertainment.

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