Caesars sets Monday call to launch loan amendment and extension

By Sara Rosenberg

New York, Feb. 3 - Caesars Entertainment Operating Co. Inc. has scheduled its lender call for Monday to launch its recently announced amendment and extension proposal, according to a market source.

Through the transaction, the company is looking to extend up to $4 billion of term loan B-1, B-2 and B-3 debt by three years to Jan. 28, 2018 through the creation of a new term loan B-6 that would be priced at Libor plus 450 basis points if less than $3.25 billion is extended and Libor plus 475 bps if more than $3.25 billion is extended.

By comparison, pricing on the roughly $5 billion of non-extended term loans is Libor plus 300 bps. Currently, the company also has about $1.2 billion in existing extended term loans due Jan. 28, 2018 that are priced at Libor plus 425 bps.

In addition, the company will ask to convert original maturity revolver commitments to extended term loans. Following the conversion, Caesars will repay extended term loans held by any consenting lender in an amount equal to 10% of the amount of the revolver commitment that was converted.

And, the company wants to extend revolver commitments that aren't being converted into term loans by three years to Jan. 28, 2017 at increased pricing, and terminate 20% of the extended revolver commitments on a pro rata basis.

The company's revolver is sized at about $1.2 billion and priced at Libor plus 300 bps with a 50 bps unused fee.

In connection with the amendment, the company plans to raise up to $1.25 billion of senior secured debt and use up to $1 billion of the proceeds to repay a portion of the term loans held by extending lenders.

Non-extended B-1, B-2 and B-3 borrowings held by extending lenders would be repaid first, followed by the repayment of extended term loans.

Bank of America Merrill Lynch is the lead bank on the deal.

Commitments toward the term loan extension and consents for the amendment are due on Feb. 10.

Lenders are being offered a 10 bps fee for consents and a 15 bps extension fee.

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

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