In one of 2014’s least surprising stories, Caesars Entertainment has had to restructure debt. It will replace $1 billion in near-term indebtedness with $1.75 billion in longer-term notes. Bond analysts have been predicting this move for a long time, even as Caesars demurred. Also, the company will liquidate 5% of its equity to institutional investors to help make ends meet. When Texas Pacific Group and Apollo Management are done with Caesars, it’s going to be worth a lot less than what they paid for it.
Wall Street was reassured by the news, with Caesars 8% up in after-hours trading. Now CEO Gary Loveman must find a way to push 2016-17 maturities into the distance or, as he puts it, “lay the foundation for both significant de-leveraging and value creation at Caesars Entertainment.” He’s also referring to the closure of the sale by Caesars (to itself) of The Cromwell, Bally’s Las Vegas and The Quad to Caesars Growth Partners, sequestering those goodies in the cupboard, as it were.
Turn over a rock, seems like, and you’ll find a gaming executive with ties to the medicinal-marijuana industry. Among those who are going to have to choose between gambling and grow houses are two of the Herbst Brothers, owners of slot route JETT Gaming. Another name on the list belongs to Armen Yemenidjian, Tropicana Las Vegas vice president of casino marketing and operations, and son of Alex. Could nepotism be at the root of the Trop’s frequent troubles, particularly when it comes to hanging onto entertainment and to business partners?
Massachusetts Gov. Deval Patrick‘s stance on casinos is a study in ambivalence. However, his inclination to stay out of the licensing process — almost without exception — has been for the best. Meanwhile, Mohegan Sun has been conducting the proverbial “productive conversations” with Boston Mayor Martin J. Walsh over the fate of Suffolk Downs. The trick is to craft a surrounding-community agreement with Walsh that will induce him to call off the dogs and end his demands for a re-vote in East Boston. Walsh is playing a dangerous game of chicken with Mohegan Sun and Wynn Resorts — which isn’t interesting with negotiating about host-community status — but it seems to stimulate him.
