Another day at Harrah’s

When you’re $19 billion or so in the hole, what’s another half-billion, right? Such is the case for Harrah’s Entertainment, which intends to issue $500 million in second-priority secured notes (soon upped to $750 million) due 2018. The notes are being floated to pay off loans that come due this year and the next. Ironically, while borrowing money to repay previously borrowed money may sound like the definition of running in place, the willingness by Wall Street to underwrite such offerings (like the recent MGM Mirage note issue) is regarded as a sign of renewed investor confidence in Las Vegas. Given that mega-lucrative baccarat play and upward trends in high-end room rates are counteracting flat visitation numbers and continued decline in lower-end room prices — good news for bargain hunters — the Street has a point.