S&P cuts Caesars loan

Standard & Poor's said it revised the preliminary rating on the proposed senior secured term loan of Caesars Entertainment Corp.'s indirect subsidiaries Linq Borrower and Octavius Borrower to B from B+ and the recovery rating to 2 from 1.

The terms of the proposed financing have been revised, including an increase in the proposed term loan size to at least $450 million from the $400 million previously contemplated. Given this increase in debt, which will be offset by a reduction in equity contributed by Caesars, recovery prospects will now be lower for senior secured term loan lenders in the event of a payment default than under the previous analysis, the agency said.

The 2 recovery rating indicates the expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default.

The preliminary B- corporate credit rating and stable rating outlook on Linq Borrower and Octavius Borrower are unaffected by the proposed revisions to the capital structure, the agency added.

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