Caesars Entertainment Corporation and Caesars Entertainment Operating Company have entered into a restructuring agreement with holders of a significant amount of CEOC’s second-lien debt notes.
In a press release Caesars Entertainment said it “will contribute an additional US$200 million of Caesars Entertainment convertible notes to the class of second lien noteholders if the class votes in favour of CEOC’s plan of reorganisation.”
“If the class does not vote in favor, the additional notes shall be distributed to second lien noteholders who have signed the agreement as an additional fee.”
The company will also, among other things, contribute approximately 5 percent common equity stake in PropCo, or cash, to the class of second lien noteholders.
CEOC voluntarily commenced a Chapter 11 reorganization on January 15, 2015. The restructuring plan contemplates that CEOC will convert its corporate structure by separating virtually all of its US-based gaming operating assets and real property assets into two companies, including an operating entity and a newly formed, publicly traded real estate investment trust that will directly or indirectly own a newly formed property company.
The proposed transactions would reduce CEOC’s debt by approximately $10 billion, providing for the exchange of approximately $18.4 billion of outstanding debt for $8.6 billion of new debt