Caesars Entertainment Corp (CZR.O) said on Monday more than 39 percent of senior bondholders backed a restructuring plan, bringing it closer to a key level of creditor support, and it released details of how the reorganized casino company will operate.
Caesars detailed lease agreements for Caesars Palace Las Vegas and other properties and new debt issuance for its operating unit, which it plans to put into bankruptcy next month and then split into a casino operator and property company. Caesars has said the bankruptcy will reduce debt to $8.6 billion from $18.4 billion for its operating unit, which runs 44 casinos in 13 states.
Caesars said in a Monday securities filing the restructuring will include two separate leases: one for Caesars Palace Las Vegas and a separate lease for certain other Caesars properties.
The Caesars Palace Las Vegas lease includes a base rent of $160 million for the first five years, while the base rent for the other properties will be $475 million for the first three years.
The operating company will also issue about $1.7 billion in new debt and the property company will issue $3.8 billion in new debt. Caesars Palace Las Vegas will issue $2.6 billion in new debt, according the filing. Last week, Caesars Entertainment Corp said it was merging with affiliate Caesars Acquisition Co (CACQ.O), which it spun off last year, to help pay for the overhaul.
The casino operator has struggled for years, particularly outside Las Vegas, as gaming options have proliferated in the United States. Caesars has been weighed down with debt that was taken in a $29 billion leveraged buyout in 2008 by TPG Capital and Apollo Global Management.
Caesars still needs to sign on 60 percent of the holders of its first-lien secured debt. It had said on Dec. 19 it needed to reach that goal by Jan. 9 for a restructuring support agreement to become effective.
Even if Caesars garners enough support from its first-lien bondholders, junior creditors may continue to pursue ongoing lawsuits that allege the restructuring improperly put choice assets beyond their reach for the benefit of Apollo and TPG. Caesars has said the moves have freed up cash to allow the company to turn itself around.
Shares of Caesars Entertainment were down 1.2 percent at $15.27 on Monday afternoon.
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