Caesars skips Dec. 15 second-priority notes payments in light of talks

By Caroline Salls

Pittsburgh, Dec. 15 – Caesars Entertainment Corp. subsidiary Caesars Entertainment Operating Co., Inc. elected not to make interest payments due Dec. 15 on its second-priority senior secured notes in light of ongoing restructuring discussions with first-lien bondholders, according to an 8-K filed with the Securities and Exchange Commission.

The interest payments due Dec. 15 included a $41.3 million payment on the operating company’s 10% second-priority senior secured notes due 2015 and 10% second-priority senior secured notes due 2018 that were issued on Dec. 24, 2008 and a $184 million interest payment due on the operating company’s 10% second-priority senior secured notes due 2018 that were issued on April 15, 2009.

The second-priority notes indentures provide 30-day grace periods for interest payments before an event of default occurs.

Caesars said there is roughly $825 million of second-lien notes outstanding under the December 2008 indenture and $3.7 billion outstanding under the April 2009 indenture. As of Sept. 30, the operating company had $1.5 billion of cash and cash equivalents.

As previously reported, Caesars is in continuing confidential restructuring talks with holders of the operating company’s 11¼% senior secured notes due 2017, 8½% senior secured notes due 2020 and 9% senior secured notes due 2020.

Caesars is a Las Vegas-based casino-entertainment company.

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