Caesars Entertainment, Inc. Announces Commencement of Tender Offer for 5.750% Senior Secured Notes Due 2025

Rhea-AI Summary

Caesars Entertainment, Inc. has announced a cash tender offer for its outstanding 5.750% Senior Secured Notes due 2025. The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on January 31, 2024 unless extended. The Tender Offer Consideration will be determined based on the U.S. Treasury Reference Security and the fixed spread. Completion of the Tender Offer is subject to certain market and other conditions, including the completion by the Issuers of new financing on satisfactory terms.

Insights

Financial Analyst

The tender offer initiated by Caesars Entertainment's subsidiaries for the 5.750% Senior Secured Notes due 2025 represents a strategic financial maneuver aimed at managing the company's debt portfolio. By repurchasing these notes prior to maturity, the company could potentially reduce its future interest expenses and improve its debt maturity profile. This could be indicative of the company's proactive approach to capital management and may signal to the market a robust financial position or an intent to restructure its capital to optimize costs.

Investors and analysts should scrutinize the fixed spread of 0bps over the U.S. Treasury Reference Security yield, as it reflects the premium over risk-free rates that the company is willing to pay. This spread, in conjunction with the overall size of the tender offer, can influence the company's cost of debt and interest savings. Furthermore, the condition of completing new financing could suggest that Caesars is looking to refinance its debt, possibly taking advantage of current market conditions to secure lower interest rates or more favorable terms.

From a market perspective, the announcement could lead to short-term stock volatility as investors reassess the company's financial strategy and its implications for future profitability. Long-term implications include potential credit rating impacts and changes in investor sentiment regarding the company's financial health.

Market Research Analyst

The gaming and hospitality industry, where Caesars Entertainment operates, is highly sensitive to economic cycles and consumer discretionary spending. A tender offer such as this could be a strategic move to streamline financial obligations in anticipation of industry headwinds or to capitalize on growth opportunities. It's essential to consider the context of the industry's current state, including tourism trends, consumer spending patterns and regulatory changes, to fully understand the potential impact of this financial decision.

Moreover, the redemption of notes not tendered, if 90% or more are accepted for purchase, could simplify the company's capital structure, potentially making it more attractive to investors. However, if less than 90% are tendered, the company plans to redeem at par, which could impact those holding the remaining notes. Market analysts should evaluate how these moves align with broader industry practices and the potential effects on the company's market position and competitive edge.

Legal Expert

The legal implications of the tender offer and subsequent actions, such as the redemption of untendered notes, must adhere to the covenants outlined in the indenture governing the Notes. The offer's terms, including the right to withdraw tendered notes and the conditions under which the Issuers can amend, extend, or terminate the offer, are critical for note holders to understand. These terms must comply with securities laws and regulations, ensuring the offer is conducted lawfully.

Additionally, the statement that intents in the press release do not constitute a notice of redemption is significant. It underscores the formal and regulated process of debt redemption, which must follow the specific provisions of the indenture. Investors should be aware of these legal nuances as they can affect the timing and certainty of the tender offer's outcomes.

LAS VEGAS & RENO, Nev.--(BUSINESS WIRE)-- Caesars Entertainment, Inc. (the “Company”) (Nasdaq: CZR) today announced that its indirect wholly-owned subsidiaries, Caesars Resort Collection, LLC (“CRC”) and CRC Finco, Inc. (“CRC Finco” and, together with the CRC, the “Issuers”), commenced a cash tender offer (the “Tender Offer”) for any and all of the Issuers’ outstanding 5.750% Senior Secured Notes due 2025 (the “Notes”) on the terms and subject to the conditions set forth in the Issuers’ Offer to Purchase, dated January 24, 2024 (the “Offer to Purchase”), and the accompanying Notice of Guaranteed Delivery, dated January 24, 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 31, 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
5.750% Senior Secured Notes due 2025	144A: 12770RAA1/US12770RAA14 Reg S: U1231BAA9/USU1231BAA99	$989,102,000	3.000% U.S. Treasury due June 30, 2024	FIT3	0bps

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 Issuers of new financing on terms and conditions satisfactory to them.

If 90% or more of the outstanding Notes are tendered and accepted for purchase in the Tender Offer, the Issuers intend 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 Issuers intend 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 Issuers 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 Issuers amend the Tender Offer, in which case the withdrawal rights may be extended as the Issuers determine, to the extent required by law. The consummation of the Tender Offer and the Issuers’ 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 Issuers 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 Issuers have 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. Neither the Company nor the Issuers undertake an 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, Issuers, 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/20240124958440/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 offer made by Caesars Entertainment, Inc.?

Caesars Entertainment, Inc. has announced a cash tender offer for its outstanding 5.750% Senior Secured Notes due 2025.

When is the expiration time for the Tender Offer?

The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on January 31, 2024 unless extended.

How is the Tender Offer Consideration determined?

The Tender Offer Consideration will be determined based on the U.S. Treasury Reference Security and the fixed spread.

What are the conditions for the completion of the Tender Offer?

Completion of the Tender Offer is subject to certain market and other conditions, including the completion by the Issuers of new financing on satisfactory terms.