S&P: Caesars view to negative

Standard & Poor's said it revised the outlook on Caesars Entertainment Corp. and wholly owned subsidiary Caesars Entertainment Operating Co. Inc. to negative from stable.

S&P also said it affirmed its B- corporate credit rating.

S&P also assigned a B rating and 2 recovery rating to the proposed $750 million first-lien senior secured notes offering to be issued jointly by Caesars Operating Escrow LLC and Caesars Escrow Corp.

The 2 recovery rating reflects 70% to 90% expected recovery in a default.

While the first-lien rating remains one notch higher than the corporate credit rating, the issuance of incremental first-lien notes continues to pressure the recovery prospects for first-lien creditors and the agency said it believes recovery prospects are currently at the very low end of the 70% to 90% range for a 2 recovery rating.

Any subsequent meaningful first-lien debt issuance beyond these notes that is not fully utilized to repay existing first-lien debt would likely result in a revision of first-lien senior secured debt recovery rating to 3 from 2 and a downgrade of the rating to B- from B.

The outlook revision to negative reflects weaker-than-expected operating performance in the second quarter, particularly at Caesars' Las Vegas region properties, S&P said.

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