It’s restructuring time again at Caesars Entertainment, but which Caesars? According to a Bloomberg interview with RBC Capital Markets analyst John Kempf, subsidiary Caesars Entertainment Operating Co. would trade second-lien debt for cash (of which Caesars maintains it has plenty) and stock, plus the issuance of new debt. Caesars stock and high-yield debt stumbled on the news, which Kempf characterized as something “coming sooner rather than later.” Lazard Ltd. had been retained by Caesars to restructure its finances, Debtwire had reported.
Caesars wouldn’t talk to Bloomberg but ” a person familiar with the matter but not authorized by the company to speak on its behalf” spun an alternate-universe scenario to the Las Vegas Review-Journal. According to this version of events, the affected entity is Caesars Acquisition Co., owner of Caesars Interactive, Planet Hollywood and Horseshoe Casino Baltimore. Either way, debt analyst Barbara Cappaert of KDP Investment Advisors was flummoxed: “Why now? There is nothing new in Caesars capital structure that would suggest an immediate need to restructure … [near-term debt maturities] are not too onerous.”
(Can you picture it? Gary Loveman saying to an underling, “I can’t authorize you to speak on my behalf — but if you do …”)
Of course, all this makes it utterly logical to bid on the biggest underachiever in the casino industry: Revel Resort. They’re no strangers to restructuring there, either.
