Caesars amendment passes; term B-6 levels emerge in secondary

By Sara Rosenberg

New York, Feb. 10 - Caesars Entertainment Operating Co. Inc.'s amendment and extension proposal has received lender approval, and the new extended term loan B-6 started being quoted in the secondary market at 89¼ bid, 90¼ offered on a when-issued basis, according to a trader.

Pricing on the B-6 loan due Jan. 28, 2018 is Libor plus 525 basis points, after flexing up earlier from talk of Libor plus 450 bps if less than $3.25 billion of the company's term loan B-1, B-2 and B-3 debt was extended and Libor plus 475 bps if more than $3.25 billion was extended.

The company was asking to extend $2.5 billion of the roughly $5 billion term loan B-1, B-2 and B-3 debt from January 2015. However, it is not yet clear how much was extended into the B-6, the trader added.

Pricing on the 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.

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 sold $1.25 billion of senior notes and will 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 amendment and extension offer.

Lenders were 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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