Caesars Reaches Restructuring Deal With Its Major Creditors
Second-lien bondholders, owed about $5.5 billion, appeared to be the biggest winners in the agreement. Those investors, led by David Tepper’s Appaloosa Management, will see a recovery rate of about 66 cents on the dollar, or about 27 cents more than under a previous plan, according to the statement.
Recovery rates for first-lien bank lenders and subsidiary guaranteed noteholders decrease by about 1 cent under the new plan, while rates for first-lien noteholders remain the same. Creditors will get about 70 percent of the fully diluted equity in the new Caesars’ structure, according to the statement.
Until last week, the second-lien bondholders had maintained a holdout. A proposal unveiled Sept. 21 offered to increase their payout by about $1.6 billion. Approximately $1.2 billion of that would come from the non-bankrupt Caesars parent in the form of cash and stock.
Caesars had originally offered about $4 billion toward the reorganization, but the second-lien bondholders held out for more, saying the company had improperly shifted valuable assets out of the operating unit before putting it into bankruptcy.
I guess Caesar's strategy of shifting around the good casinos and leaving the bad ones to bond holders didn't work.
they caved and ponied up a lot more $$$ to them.
I'm guessing court rulings against them poked some legal holes in that strategy.
Quote: 100xOddshttp://www.cdcgamingreports.com/caesars-reaches-restructuring-deal-with-its-major-creditors
Second-lien bondholders, owed about $5.5 billion, appeared to be the biggest winners in the agreement. Those investors, led by David Tepper’s Appaloosa Management, will see a recovery rate of about 66 cents on the dollar, or about 27 cents more than under a previous plan, according to the statement.
Recovery rates for first-lien bank lenders and subsidiary guaranteed noteholders decrease by about 1 cent under the new plan, while rates for first-lien noteholders remain the same. Creditors will get about 70 percent of the fully diluted equity in the new Caesars’ structure, according to the statement.
Until last week, the second-lien bondholders had maintained a holdout. A proposal unveiled Sept. 21 offered to increase their payout by about $1.6 billion. Approximately $1.2 billion of that would come from the non-bankrupt Caesars parent in the form of cash and stock.
Caesars had originally offered about $4 billion toward the reorganization, but the second-lien bondholders held out for more, saying the company had improperly shifted valuable assets out of the operating unit before putting it into bankruptcy.
I guess Caesar's strategy of shifting around the good casinos and leaving the bad ones to bond holders didn't work.
they caved and ponied up a lot more $$$ to them.
I'm guessing court rulings against them poked some legal holes in that strategy.
Are you sure the shifting strategy failed? It's definitely true that Caesars was forced to pay more than they wanted to the second-lien bondholders. But to determine the value of the strategy, you'd also need to know if that payment was more or less than they'd have paid if the shift wasn't implemented. I'm guessing that it was less.
Quote: rdw4potusAre you sure the shifting strategy failed? It's definitely true that Caesars was forced to pay more than they wanted to the second-lien bondholders. But to determine the value of the strategy, you'd also need to know if that payment was more or less than they'd have paid if the shift wasn't implemented. I'm guessing that it was less.
ahh.. true.
overall, caesars will wipe out ~30% of it's $18B debt.
but the Apollo Group gives up a big stake in Caesars. (but which caesars? bankrupt bad casinos sub unit, or caesars parent?)
now waiting for a Mathlete for the calcs to the scenario of the Apollo Group not shifting around the good casinos.
also, this reorg is just for the bad casinos sub unit?
Apollo Group still keeps majority control over the good casinos sub unit?
Only CEOC sub unit filed for bankruptcy:
