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

Rhea-AI Summary

Caesars Entertainment, Inc. (Nasdaq: CZR) announced the pricing terms of a cash tender offer for its outstanding 5.750% Senior Secured Notes due 2025. The Tender Offer is scheduled to expire on January 31, 2024, and is subject to certain market and other conditions. Holders of the Notes may also receive accrued and unpaid interest. The company may redeem any untendered Notes or satisfy and discharge the indenture governing the Notes. The complete terms and conditions of the Tender Offer are available from the tender and information agent, D.F. King & Co., Inc.

Insights

Financial Analyst

Examining the tender offer for the 5.750% Senior Secured Notes due 2025 by Caesars Entertainment's subsidiaries, there are several financial implications to consider. Firstly, the offer's pricing terms are set above par, at $1,001.83 per $1,000 principal, which indicates a premium for the note holders. This premium could suggest that the company is eager to retire this debt ahead of maturity, possibly to restructure its debt profile or take advantage of lower interest rates through refinancing. The fixed spread at 0 basis points over the yield of the U.S. Treasury Reference Security, combined with the current reference yield, provides a benchmark for investors to assess the attractiveness of the offer.

Furthermore, the condition that the tender offer is contingent on the issuers securing new debt financing implies a strategic shift in the company's capital structure. Investors will be keen to understand the terms of the new financing, as it may affect the company's leverage and interest expense. By offering to redeem any notes not tendered at the same consideration, the company is signaling a strong commitment to this liability management exercise. However, the fact that the tender offer is not conditioned on a minimum amount of Notes being tendered gives the company flexibility.

From a broader market perspective, such debt management activities can impact the company's credit rating and stock market performance. Investors and analysts will closely monitor the success of the tender offer and the terms of the new debt to evaluate the potential impact on the company's financial health and stock valuation.

Debt Market Analyst

The tender offer by Caesars Entertainment's subsidiaries is a notable event in the debt market, signaling a proactive approach to debt management. The selection of the 5.750% Senior Secured Notes due 2025 suggests that these are a focal point for the company's current capital structure optimization. By potentially redeeming the notes at a slight premium and offering accrued interest, the company is providing an incentive for bondholders to participate, which could result in a favorable response from the market.

The reference to the U.S. Treasury due June 30, 2024 as the benchmark for setting the tender offer consideration is a standard practice in the debt market, providing clarity and transparency in the pricing mechanism. This approach enables bondholders to make an informed decision based on prevailing market conditions. The possibility of satisfying and discharging the indenture following the tender offer could result in the elimination of certain covenants, which would grant the company more operational flexibility.

It is also important to note that the completion of this tender offer is subject to market conditions and the successful completion of new debt financing. This condition introduces an element of uncertainty for bondholders, as the final outcome depends on the company's ability to secure favorable financing terms in the current market environment.

Legal Expert

In the context of the tender offer, there are legal considerations that are critical for the bondholders and the company. The tender offer documents, including the Offer to Purchase and Notice of Guaranteed Delivery, are legally binding documents that outline the terms, conditions and procedures of the offer. It is essential for bondholders to understand these documents thoroughly before making a decision, as they contain important information on the rights and obligations of both parties.

The legal framework governing the tender offer, particularly the conditions under which the company can withdraw or amend the offer, is of interest to investors. The company's right to extend, amend, or terminate the offer, subject to certain conditions and applicable law, provides a degree of flexibility but also introduces potential variability in the outcome. Additionally, the mention of a potential redemption of the notes not tendered, at a price equal to the tender offer consideration, is contingent on at least 90% of the notes being tendered, which is a significant threshold that could influence the decision-making of bondholders.

Lastly, the legal stipulation that the consummation of the tender offer and the obligations to accept and pay for validly tendered notes are subject to the satisfaction of certain conditions, including the financing condition, is a standard clause that protects the company's interests. However, it is important for investors to be aware of these conditions as they represent potential risks to the completion of the tender offer.

LAS VEGAS & RENO, Nev.--(BUSINESS WIRE)-- Caesars Entertainment, Inc. (the “Company”) (Nasdaq: CZR) today announced the pricing terms of the previously announced cash tender offer (the “Tender Offer”) 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 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.

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 was 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 below, as quoted on the Bloomberg Bond Trader FIT3 series of pages, at 2:00 p.m. New York City time, today.

Title of Security	CUSIP Numbers/ISINs	Principal Amount Outstanding	U.S. Treasury Reference Security	Reference Yield	Bloomberg Reference Page	Fixed Spread	Consideration(1)
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	5.257%	FIT3	0 bps	$1,001.83

(1) Per $1,000 principal amount of Notes accepted for purchase and excluding accrued and unpaid interest up to, but excluding, the settlement date of the Tender Offer.

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 February 6, 2024. Completion of the Tender Offer is subject to certain market and other conditions, including the completion by the Issuers of new debt financing on terms and conditions satisfactory to them.

The Issuers intend to either (i) redeem any Notes that are 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 (provided that at least 90% of the Notes are tendered and accepted for purchase in the Tender Offer) or (ii) 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 any 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.

J.P. Morgan Securities LLC is acting as the lead dealer manager and Deutsche Bank Securities, Inc. is acting 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/20240130840524/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 ticker symbol for Caesars Entertainment, Inc.?

The ticker symbol for Caesars Entertainment, Inc. is CZR.

What is the expiration date of the Tender Offer for the 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.

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

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

How can holders of the Notes obtain the complete terms and conditions of the Tender Offer?

Holders of the Notes can obtain the complete terms and conditions of the Tender Offer from the tender and information agent, D.F. King & Co., Inc.