888 Acquisitions delays pricing of $1.23 billion equivalent bonds and loans until July 4 week

By Paul A. Harris

Portland, Ore., July 1 – Caesars Entertainment, Inc. announced Friday that it has closed on the sale of the non-U.S. assets of William Hill International to 888 Holdings plc.

However, underwriters remain on the hook for $1.23 billion equivalent of bond and bank debt backing the deal that they had endeavored to syndicate ahead of the extended Independence Day holiday weekend in the United States, market sources say.

Those tranches of debt will now be pushed into the week ahead, they add.

For the past week issuing entity 888 Acquisitions Ltd. has been marketing a £600 million equivalent two-part offering of euro-denominated senior secured notes (B1/B).

The bond portion of the acquisition financing includes six-year non-call one-year floating-rate notes shopped with early spread guidance of 525 basis points to 550 bps at a discount price in the low 90s, implying a yield in the 10% area.

The bond deal also includes five-year non-call two-year fixed-rate notes with early coupon guidance in the 6% to 7% area, also at a discount.

Tranche sizes in the Rule 144A and Regulation S bond deal remain to be determined.

In addition, the financing includes a $500 million six-year senior secured covenant-lite term loan B talked at SOFR plus 10 bps CSA plus 525 bps with a 0.5% floor, an original issue discount of 92 to 93 and 101 hard call protection for one year.

The commitment deadline for the term loan had been set for 10 a.m. ET on Thursday (June 30).

The underwriters, with JPMorgan left lead on the bonds and Morgan Stanley left lead on the loan, and Mediobanca and Barclays bookrunners as well, shopped the debt as big waves of volatility – driven by concerns about runaway inflation and a global economic slowdown, as well as ongoing geopolitical risk – washed over the capital markets.

With the acquisition set to fund on July 1, pressure on the committed banks to syndicate the bonds and loans continued to build throughout the past week, according to a New York-based bond trader.

In a Friday press release, Caesars announced that after the repayment of debt and other working capital adjustments it received $730 million of proceeds in its sale of the William Hill assets.

Caesars said it intends to use the proceeds to pay down outstanding debt.

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