Caesars Entertainment and CEOC Reach Agreement with Group of Second Lien Noteholders

  • Caesars Entertainment Corporation
  • 08.02.16
Caesars Entertainment Corporation (Caesars Entertainment) and Caesars Entertainment Operating Company, Inc. (CEOC) have entered into a restructuring support agreement with holders of a significant amount of CEOC's second lien notes (Second Lien Noteholders).

These Second Lien Noteholders, together with the second lien notes held by parties subject to other restructuring support agreements, hold approximately 37 percent of CEOC's second lien notes. The agreement provides for a substantial improvement in recoveries for Second Lien Noteholders to those contemplated in CEOC's plan of reorganization, and adds to the group of creditors supporting CEOC's restructuring plan.

The agreement provides all holders of second lien notes with recoveries of at least 46 cents on the dollar based on the midpoint valuation in CEOC's disclosure statement. The agreement will go effective when the agreement is signed by holders owning greater than 50.1 percent of the second lien notes under certain of the indentures. The recoveries of those holders of second lien notes who sign the agreement will increase by an additional 4 cents on the dollar when the agreement goes effective and a further 5 cents on the dollar when the agreement gains the support of at least two thirds of the class, or CEOC's restructuring plan goes effective, bringing the potential recovery to 55 cents on the dollar for all signers of the agreement. The contemplated recovery includes a combination of convertible notes and equity in "New CEC," the surviving entity in the planned merger of Caesars Entertainment and Caesars Acquisition Company.

With the public announcement of the terms of this enhanced restructuring agreement, Caesars Entertainment and CEOC will seek to gain further support from additional Second Lien Noteholders. The plan currently on file is subject to restructuring and support agreements with lenders under CEOC's credit facility,  the Official Committee of Unsecured Creditors and the holders of Subsidiary Guarantee Notes. Caesars Entertainment and CEOC have continued to engage with the remaining creditor groups, including the official committee of Second Lien Noteholders, and are hopeful of achieving a fully consensual outcome.

Forward Looking Statement

This release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as "will" and "continue" or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions and future performance, and future financial results of CEC.  These forward-looking statements are based on current expectations and projections about future events.

You are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance of CEC may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other factors described from time to time in our reports filed with the Securities and Exchange.

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