Caesars lifts talk on extended term loan B-6 to Libor plus 525 bps

By Sara Rosenberg

New York, Feb. 8 - Caesars Entertainment Operating Co. Inc. increased pricing on its proposed extended term loan B-6 to Libor plus 525 basis points, according to a market source.

Previous talk had been Libor plus 450 bps if less than $3.25 billion was extended and Libor plus 475 bps if more than $3.25 billion was extended.

In addition, the company is now looking to extend $2.5 billion of its term loan B-1, B-2 and B-3 debt by three years to Jan. 28, 2018, as opposed to extending up to $4 billion of the debt, the source said.

Pricing on the roughly $5 billion of non-extended term loan B-1, B-2 and B-3 is Libor plus 300 bps. Currently, the company also has about $1.2 billion of existing extended term loans due Jan. 28, 2018 that are priced at Libor plus 425 bps.

Furthermore, as part of the changes, a springing maturity was added to the proposed term loan B-6 to April 2017 if the company's senior secured notes due 2017 are not taken out by then, the source added.

Commitments towards the extended term loan, as well as consents on the company's concurrent amendment, are due on Thursday.

As was previously reported, Caesars is also asking 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 and extension, the company is issuing $1.25 billion of senior notes and using 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 amendment and extension offer.

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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