Caesars $20 BILLION in debt and growing

Quote: coilman

http://www.lvrj.com/business/caesars-seeks-1-5-billion-in-new-debt-189727921.html

Cut them off and put them on unemployment.

Very Interesting. I have a few race 2 rewards
bucks built up and hope to be able to spend
those for buffets / rooms / etc.

Quote: coilman

http://www.lvrj.com/business/caesars-seeks-1-5-billion-in-new-debt-189727921.html

They did small IPO not long ago....."Where are all the customers yachts"?

Quote: treetopbuddy

They did small IPO not long ago....."Where are all the customers yachts"?

correction it was a secondary offer.....whatever

On July 14, 2004 Harrah's Entertainment agreed to purchase Caesars Entertainment for over $5 billion.

At the time of the takeover, CET consisted of the following properties.
Bally's Atlantic City, including Claridge Casino at Bally's and Wild Wild West Casino, Atlantic City, New Jersey
Bally's Las Vegas
Caesars Atlantic City, Atlantic City New Jersey
Caesars Windsor, Windsor, Ontario, Canada
Caesars Palace at Sea - no longer on board Crystal Cruises
Caesars Indiana, Elizabeth, Indiana
Caesars Palace Las Vegas
Conrad Resort, Punta Del Este, Uruguay
Flamingo Las Vegas, Las Vegas, Nevada
Flamingo Laughlin, Laughlin, Nevada
Grand Casino Biloxi, Biloxi, Mississippi - Reopened after destruction by Hurricane Katrina
Grand Casino Gulfport, Gulfport, Mississippi - Destroyed by Hurricane Katrina, land sold and new casino Island View Casino
Grand Casino Tunica, Tunica Resorts, Mississippi
Paris Las Vegas
Sheraton Casino and Hotel Tunica, Tunica Resorts, Mississippi

In May 1998 Gary Loveman joined the organization as Chief Operating Officer. He is thought to do for the industry what Ray Kroc did for hamburgers.

When you think about it, Harrah's acquired all those CET properties for $5 billion. Their existing inventory of properties in 2004 was far less extensive. In 1999 Harrah's bought the Rio All Suite Hotel and Casino for $888 million giving the company their 2nd casino in Las Vegas. Later that year, the company moved its headquarters from Memphis, Tennessee to Las Vegas. The bulk of their assets prior to 2004 were in Reno, Laughlin, Tahoe and Atlantic City.

Since 2004 they acquired Imperial Palace and Planet Hollywood at fire sale and a bunch of minor properties and racinos around the country.

Now, how unbelievable is it that their debt has ballooned to over $20 billion in less than a decade. It is not like they built a City Center.

Quote: pacomartin

Now, how unbelievable is it that their debt has ballooned to over $20 billion in less than a decade. It is not like they built a City Center.

It is my understanding that the 2004 buyout for $5 bill was PLUS DEBT.

I find it hard to believe that $5b would get all those (see above) properties with no debt.

Just like people think the trump marina sold for about $40 million and that's it. Some news reports (not looking them up) reported $300-400 million in debt, the $40m was just to buy the debt!!!

deleted

Quote: whatme

It is my understanding that the 2004 buyout for $5 bill was PLUS DEBT.

Harrah's Inc was taken private by affiliates of Leon Black’s Apollo Global Management LLC and David Bonderman’s TPG Capital for $30.7 billion in 2008. Any debt that they acquired in the takeover in 2004 was comparatively minimal.

I don't remember the exact numberfor Ceasars buyout in 2004, but I saw it again and again with the buyout of Hard Rock, of Stratosphere, and others. The companies were carrying normal kind of debt that was occurred through the years by construction, capital improvements, and buyouts, Then in the great private equity rush, these companies all assumed huge debts on the gamble that future growth would easily pay these debts.

Talk about Martingale.

Quote: JohnnyQ

Very Interesting. I have a few race 2 rewards
bucks built up and hope to be able to spend
those for buffets / rooms / etc.

That explains the Harrah's AC $700 marina tower price quotes for NYE.

Quote: onenickelmiracle

That explains the Harrah's AC $700 marina tower price quotes for NYE.

Sorry 'bout that ! I hope there is another
Race this year, but wouldn't bet on it.

Quote: pacomartin

On July 14, 2004 Harrah's Entertainment agreed to purchase Caesars Entertainment for over $5 billion. . . .
Now, how unbelievable is it that their debt has ballooned to over $20 billion in less than a decade. It is not like they built a City Center.

Capping a weekend of bad news piled on bad news, Massachusetts told CZR to get lost:
"The trigger for the company’s weekend in hell was a nearly 600-page investigative report issued by the Massachusetts Gaming Commission. Regulators said Caesars — which operates 54 casinos in 13 states — wasn’t suitable to manage a casino there. The commission suggested that the Suffolk Downs Race Track cut loose its partner in the project." lvrj

Try this Link to LVRJ Blog

Thanks. I hadn't realized that the security addition was so important for access.

Quote: SanchoPanza

Quote: pacomartin

On July 14, 2004 Harrah's Entertainment agreed to purchase Caesars Entertainment for over $5 billion. . . .
Now, how unbelievable is it that their debt has ballooned to over $20 billion in less than a decade. It is not like they built a City Center.

Capping a weekend of bad news piled on bad news, Massachusetts told CZR to get lost:
"The trigger for the company’s weekend in hell was a nearly 600-page investigative report issued by the Massachusetts Gaming Commission. Regulators said Caesars — which operates 54 casinos in 13 states — wasn’t suitable to manage a casino there. The commission suggested that the Suffolk Downs Race Track cut loose its partner in the project." lvrj

This follow-up quoting Steve Wynn about Caesar's troubles is worth reading as well.

RJ Column

Yeah, to be expected... At the bottom of article Conan O'Brien's punch-line quite telling.

Below is another article explaining just how bad things really are for this corporation:

http://www.reviewjournal.com/business/casinos-gaming/caesars-sees-quarterly-net-loss-increase-78-percent

At what point do these guys simply cut their losses and move on? I know they are perceived too big to fail but that is bollox. If they renege on their debt commitments, they are done!

Here is an idea. Delist and disband the company and sell the casinos piece meal on the open market. Do't you guys think some healthy competition on the strip has to be good for Vegas?

The problem is that the only groups of people able to afford casinos now are the other corporations in town.

Surely we can all do without this company out there?

I can't imagine a casino property will stand idle and empty for too long on the strip?

After all of these stories I feel like I need to drive to the nearest CET and use my $2500 worth of points before they are useless.

Everybody is waiting to ride out this economic downturn. In a few year, this investment will look like a great move. US has been in great recession for the last few years. It has not bounced back yet.

Quote: speedycrap

Everybody is waiting to ride out this economic downturn. In a few year, this investment will look like a great move. US has been in great recession for the last few years. It has not bounced back yet.

The general economy is not the relevant measure. As one Economist of long ago said: his Index of the Economy was determined by the number of bettors at the two dollar window and the number of bettors lining up at the hundred dollar window. The casinos are not ghost towns, people are betting, maybe a few belts have been tightened here and there but in general the industry has recovered irrespective of what economists argue about the National economy.

There have been so many corporate shell games involving CET that I have no idea who owns what and which properties are subject to which bond issues and I have nothing but pity for the poor judge if CET ever winds up in bankruptcy court.

I don't see what the big deal is. $20 billion is chump change when you have a ferris wheel.

When MGM was in the throes of debt and Icahn was threatening to tack over, I bought it at about $2 a share. Sold it less than a year later at $11. Caesars isn't there and their debt is not about to be followed by a revenue bump like MGM's was. But if you have some cash you can invest in junk, CZR might be the way to go. Their LV revenues actually increased y-o-y.

Although, a $367 million going-concern loss with no real revenue bumps isn't hopeful ... at least, I don't think LINQ will be that popular with locals.

Not that it's important, but Caesars Entertainment Corp. trades on the NASDAQ under "CZR." Source: http://investor.caesars.com/releasedetail.cfm?ReleaseID=846208.

"CET" at the NYSE is some company called Central Securities Corp. I looked "CET" up on the NASDAQ and didn't find anything.