Caesars Entertainment, Inc. Announces Commencement of Tender Offer for 6.250% Senior Secured Notes Due 2025

Rhea-AI Summary

Caesars Entertainment, Inc. has announced a cash tender offer for its outstanding 6.250% Senior Secured Notes due 2025. The Tender Offer is scheduled to expire on January 30, 2024, and is subject to certain market and other conditions. Holders of the Notes are urged to read the Tender Offer Documents carefully before making any decision. The Tender Offer Consideration will be determined based on the bid-side price of the U.S. Treasury Reference Security and the fixed spread for the Notes. The completion of the Tender Offer is subject to the completion of new debt financing on terms and conditions satisfactory to the company.

Insights

Financial Analyst

The announcement by Caesars Entertainment, Inc. regarding the cash tender offer for its 6.250% Senior Secured Notes due 2025 signifies a strategic move in the company's capital structure management. This action typically aims to optimize the company's debt profile by potentially reducing interest expenses or altering maturity schedules. The tender offer's success depends on market conditions and the company's ability to secure new debt financing on satisfactory terms. The impact on the company's financials could be significant, as the outstanding principal amount of the Notes is substantial at $3,399,000,000.

Investors and stakeholders should note the potential for a change in the yield curve, as the fixed spread is set at 0bps over the referenced U.S. Treasury security. This could affect the final purchase price of the Notes, which is a critical factor in evaluating the attractiveness of the tender offer. Additionally, the possibility of redeeming any untendered Notes at the tender offer consideration post-settlement could lead to a near-term cash outflow, impacting liquidity.

From a credit risk perspective, the satisfaction and discharge of the indenture, should less than 90% of the Notes be tendered, would remove certain covenants, potentially altering the risk profile of the remaining debt. This could have implications for the company's credit rating and borrowing costs in the future.

Legal Expert

The tender offer process is governed by specific legal frameworks that ensure transparency and fairness in such transactions. The Offer to Purchase and the Notice of Guaranteed Delivery are critical documents that outline the terms, conditions and legal implications of the tender offer. It is vital for note holders to understand their rights regarding withdrawal and the potential amendments to the offer, as these can affect their investment decisions.

Moreover, the legal stipulations regarding the redemption of untendered Notes, particularly the notice period and redemption price, are bound by the indenture governing the Notes. The company's statement that it intends to redeem any untendered Notes if 90% or more of the outstanding Notes are tendered highlights the importance of understanding the indenture provisions. Such actions can influence the secondary market for these securities and must be executed in compliance with securities law and regulations.

Market Research Analyst

The tender offer reflects Caesars Entertainment's broader market strategy and positioning within the gaming and hospitality industry. The company's decision to refinance or pay down its debt ahead of maturity can be seen as a proactive measure in response to market conditions, including interest rate trends and the company's operational performance. The gaming industry is capital-intensive and how a company manages its debt can provide insights into its financial health and strategic priorities.

Market reaction to such announcements can be influenced by the perceived benefits of the tender offer, such as interest savings and reduced leverage, against the costs, including transaction fees and potential impacts on liquidity. The tender offer's outcome could also signal investor confidence in the company's future earnings and cash flow generation capabilities.

LAS VEGAS & RENO, Nev.--(BUSINESS WIRE)-- Caesars Entertainment, Inc. (the “Company”) (Nasdaq: CZR) today announced that it has commenced a cash tender offer (the “Tender Offer”) for any and all of its outstanding 6.250% Senior Secured Notes due 2025 (the “Notes”) on the terms and subject to the conditions set forth in the Company’s Offer to Purchase, dated January 18, 2024 (the “Offer to Purchase”), and the accompanying Notice of Guaranteed Delivery, dated January 18, 2024 (the “Notice of Guaranteed Delivery” and together with the Offer to Purchase, the “Tender Offer Documents”).

The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on January 30, 2024 unless extended or earlier terminated as described in the Offer to Purchase (such time and date, as may be extended, the “Expiration Time”). Tendered Notes may be validly withdrawn at any time at or prior to the Expiration Time as described in the Offer to Purchase. Holders of the Notes are urged to read the Tender Offer Documents carefully before making any decision with respect to the Tender Offer.

Certain information regarding the Notes and the U.S. Treasury Reference Security, the Bloomberg reference page and the fixed spread is set forth in the table below.

Title of Security	CUSIP Numbers/ISINs	Principal Amount Outstanding	U.S. Treasury Reference Security	Bloomberg Reference Page	Fixed Spread
6.250% Senior Secured Notes due 2025	144A: 28470RAH5/US28470RAH57	$3,399,000,000	3.000% U.S. Treasury due June 30, 2024	FIT3	0bps
	Reg S: U2829LAC9/USU2829LAC91
	IAI: 28470RAJ1/US28470RAJ14

The "Tender Offer Consideration" for each $1,000 principal amount of the Notes validly tendered, and not validly withdrawn, and accepted for purchase pursuant to the Tender Offer will be determined in the manner described in the Offer to Purchase by reference to the fixed spread for the Notes specified above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified above, as quoted on the Bloomberg Bond Trader FIT3 series of pages, at 2:00 p.m. New York City time, on January 30, 2024, the date on which the Tender Offer is currently scheduled to expire.

In addition to the Tender Offer Consideration, holders of Notes that are validly tendered and accepted for purchase will also receive accrued and unpaid interest to, but not including, the settlement date for the Tender Offer, which is currently expected to be no later than 5 business day following the Expiration Time. Completion of the Tender Offer is subject to certain market and other conditions, including the completion by the Company of new debt financing on terms and conditions satisfactory to it.

If 90% or more of the outstanding Notes are tendered and accepted for purchase in the Tender Offer, the Company intends to redeem any Notes that were not tendered and accepted for purchase upon not less than 10 or more than 60 days’ notice following the settlement date of the Tender Offer at a price equal to the Tender Offer Consideration, plus accrued and unpaid interest, to, but excluding, the date of redemption.

To the extent that less than 90% of the outstanding Notes are tendered and accepted for purchase in the Tender Offer, the Company intends to satisfy and discharge the indenture governing the Notes, in accordance with the provisions thereof, and to redeem at par on July 1, 2024 the Notes that remain outstanding following the consummation of the Tender Offer. Following such satisfaction and discharge, the Company will no longer be subject to the covenants in the indenture governing the Notes.

As described in the Offer to Purchase, tendered Notes may be validly withdrawn at any time prior to or at, but not after, the withdrawal deadline, unless the Company amends the Tender Offer, in which case the withdrawal rights may be extended as the Company determines, to the extent required by law. The consummation of the Tender Offer and the Company’s obligations to accept for purchase, and to pay for, Notes validly tendered (and not validly withdrawn) pursuant to the Tender Offer are subject to the satisfaction of or waiver of the financing condition and the other conditions described in the Offer to Purchase.

Statements of intent in this press release shall not constitute a notice of redemption under the indenture governing the Notes. Any such notice, if made, will only be made in accordance with the provisions of the indenture. The Company may amend, extend or, subject to certain conditions and applicable law, terminate the Tender Offer at any time in its sole discretion. The Tender Offer is not conditioned on any minimum amount of Notes being tendered.

This press release shall not constitute an offer to purchase or the solicitation of an offer to sell the Notes or any other securities, nor shall there be any offer or sale of any Notes or other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. The complete terms and conditions of the Tender Offer are described in the Offer to Purchase and the related Notice of Guaranteed Delivery, copies of which may be obtained from D.F. King & Co., Inc., the tender and information agent for the Tender Offer, at http://www.dfking.com/Caesars, by email at Caesars@dfking.com, by telephone at (866) 811-1442 (U.S. toll free) and (212) 269-5550 (banks and brokers) or in writing at D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005, Attention: Michael Horthman.

The Company has engaged J.P. Morgan Securities LLC to act as the lead dealer manager and Deutsche Bank Securities, Inc. to act as the co-dealer manager in connection with the Tender Offer. Questions regarding the terms of the Tender Offer may be directed to J.P. Morgan Securities LLC by telephone at (866) 834-4666 (U.S. toll-free) and (212) 834-4087 (collect).

About Caesars Entertainment, Inc.

Caesars Entertainment, Inc. (NASDAQ: CZR) is the largest casino-entertainment company in the US and one of the world’s most diversified casino-entertainment providers. Since its beginning in Reno, NV, in 1937, Caesars Entertainment, Inc. has grown through development of new resorts, expansions and acquisitions. Caesars Entertainment, Inc.’s resorts operate primarily under the Caesars®, Harrah’s®, Horseshoe®, and Eldorado® brand names. Caesars Entertainment, Inc. offers diversified gaming, entertainment and hospitality amenities, one-of-a-kind destinations, and a full suite of mobile and online gaming and sports betting experiences. All tied to its industry-leading Caesars Rewards loyalty program, the company focuses on building value with its guests through a unique combination of impeccable service, operational excellence and technology leadership. Caesars is committed to its employees, suppliers, communities and the environment through its PEOPLE PLANET PLAY framework. To review our latest CSR report, please visit www.caesars.com/corporate-social-responsibility/csr-reports. Know When To Stop Before You Start®. Gambling Problem? Call 1-800-522-4700.

Forward-Looking Statements

This press release may include information that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risk and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

Disclaimer

This announcement must be read in conjunction with the Tender Offer Documents. This announcement and the Tender Offer Documents (including the documents incorporated by reference therein) contain important information which must be read carefully before any decision is made with respect to the Offer. If any holder of Notes is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, immediately from its stockbroker, bank manager, attorney, accountant or other independent financial or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Offer. None of the Company, the dealer managers, the tender and information agent, or any person who controls or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether holders of Notes should participate in the Offer.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240118419375/en/

Caesars Entertainment, Inc.

Investor Relations:

Brian Agnew, bagnew@caesars.com

Charise Crumbley, ccrumbley@caesars.com

Media Relations:

Kate Whiteley, kwhiteley@caesars.com

Source: Caesars Entertainment, Inc.

FAQ

What is the Tender Offer for Caesars Entertainment, Inc.?

The Tender Offer is for any and all of its outstanding 6.250% Senior Secured Notes due 2025.

When does the Tender Offer expire?

The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on January 30, 2024.

How is the Tender Offer Consideration determined?

The Tender Offer Consideration will be determined by reference to the fixed spread for the Notes specified plus the yield based on the bid-side price of the U.S. Treasury Reference Security.

What is the completion condition for the Tender Offer?

The completion of the Tender Offer is subject to certain market and other conditions, including the completion by the Company of new debt financing on terms and conditions satisfactory to it.

Who is the lead dealer manager for the Tender Offer?

J.P. Morgan Securities LLC is the lead dealer manager for the Tender Offer.