Published on 2/4/2013 in the Prospect News High Yield Daily.
New Issue: Caesars prices $1.5 billion tap of 9% secured notes due 2020 at 97.5
By Paul A. Harris
Portland, Ore., Feb. 4 - Caesars Entertainment Corp. priced a $1.5 billion add-on to its 9% senior notes due Feb. 15, 2020 (B2/B/) at 97.5 to yield 9.497% on Monday, according to an informed source.
The reoffer price came 2.5 points cheap relative to the cheap end of the 100 to 100.5 price talk.
Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the joint bookrunners for the quick-to-market deal.
Proceeds will be used to repay term loan debt.
The issuing entities are Caesars Operating Escrow LLC and Caesars Escrow Corp., wholly owned unrestricted subsidiaries of Caesars Entertainment Operating Co., Inc.
The Las Vegas-based gaming and entertainment company priced the original $750 million issue at par on Aug. 15, 2012. A previous $750 million add-on priced at 98.25 to yield 9.336% on Dec. 6, 2012.
The new add-on notes will be fungible with the existing notes upon registration.
| Issuers: | Caesars Operating Escrow LLC & Caesars Escrow Corp. to be assumed by Caesars Entertainment Operating Co., Inc.
|
| Face amount: | $1.5 billion
|
| Proceeds: | $1.46 billion
|
| Maturity: | Feb. 15, 2020
|
| Security description: | Add-on to 9% senior secured notes due Feb. 15, 2020
|
| Bookrunners: | Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co., Morgan Stanley & Co. LLC
|
| Coupon: | 9%
|
| Price: | 97.5
|
| Yield: | 9.497%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2016, then callable at 104.5, 102.25, par on and after Feb. 15, 2018
|
| Equity clawback: | 35% at 109 until Feb. 15, 2015
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 4
|
| Settlement date: | Feb. 15 with accrued interest
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 100 to 100.5
|
| Marketing: | Quick to market
|
| Original issue: | $750 million priced at par on Aug. 15, 2012
|
| Previous add-on: | $750 million add-on priced at 98.25 to yield 9.336% on Dec. 6, 2012
|
| Fungibility: | New add-on notes will be fungible with the existing notes upon registration
|
| Total issue size: | $3 billion
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