Caesars Entertainment, a prominent player in the hospitality and gaming industry, made a significant financial announcement on Wednesday. The company revealed its intention to sell $1.5 billion in bonds through a private placement in accordance with Rule 144A of the Securities Act of 1933. These senior secured notes are set to mature in 2032 and will be guaranteed by Caesars’ domestic subsidiaries, pending regulatory approvals.
In addition to the bond sale, Caesars also outlined plans to secure a new $2 billion senior secured term loan facility known as the “New Term B-1 Loan” by amending the existing CEI Credit Agreement. The company clarified that the closing of the new loan was not contingent on the sale of the notes.
The purpose of raising these funds is to address existing debt obligations, including the 6.250% Senior Secured Notes due in 2025, and to cover expenses and fees associated with both transactions.
This financial move comes in the wake of Caesars’ disclosure of its preliminary Q4 2023 results. The company acknowledged that its anticipated earnings before interest, taxes, depreciation, and amortization (EBITDA) and sales for the fourth quarter may not align with analysts’ projections.
Caesars estimated that its Q4 2023 revenue would fall between $2.815 billion and $2.835 billion, slightly lower than the Wall Street forecast of $2.89 billion. Similarly, the projected EBITDA for the same period is expected to range from $920 million to $940 million, below analysts’ expectations of $957 million.
The company’s financial maneuvers and preliminary results have garnered attention from industry observers and investors, as they seek to understand the implications of these developments for Caesars Entertainment’s future performance and market position.