Bondholders say Caesars defaulted on debt terms
By Eli Segall, Las Vegas Sun
Bondholders are ratcheting up pressure on Caesars Entertainment Corp., saying the debt-laden casino giant defaulted on the terms of possibly more than $1 billion in debt when it sold four casinos to an affiliate this year.
Las Vegas-based Caesars, which received the default notice Thursday, rejected the claim as “baseless” and said the company would “defend itself vigorously against any action” the creditors take.
Caesars did not say which bondholders filed the notice against subsidiary Caesars Entertainment Operating Co., nor did it explicitly say how much debt the creditors claim is at stake.
However, the lenders say they hold 30 percent of $3.7 billion in bonds that were issued in 2009, according to Caesars.
The key in this story is “sold four casinos to an affiliate this year”, as it would appear that they sold it to themselves (probably in the ‘scam’ sense), meaning there’s cash-flow that doesn’t necessarily go to retiring the debt, incurred at a high-rate in the wake of selling themselves (before) to investment bankers at the pinnacle of the 2008 financial debacle. . . .at over 20 billion $$ for 50 properties. . .
They have no allegiance to any particular ‘brand’
(“Caesar’s” always had a Vegas ‘high-roller’ focus), so let’s change from Harrah’s (with its one-time Sterling reputation) to Caesar;s, so “we’ll attract those ‘high-rollers’ that now go to Macau”. . .
Is it then any wonder that their own bond-holders might think they’ll be left holding the bag (?). . .
Not really. . .