Bloomberg News

Caesars Bonds Fall Three Straight Days to Lose 4.5 Cents on Week

September 26, 2012

Caesars Entertainment Corp. (CZR:US) bonds fell for a third consecutive day, losing 4.5 cents on the dollar this week as a junk-bond benchmark declined by the most since June.

The largest U.S. casino owner’s $3.3 billion of 10 percent second-lien notes due December 2018 dropped 2 cents to 64 cents at 11:20 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Regulatory Authority. The securities yielded 20.5 percent.

BlackRock Inc. (BLK:US)’s iShares iBoxx High Yield Corporate Bond fund (HYG:US), which holds 2.7 percent of the 10 percent debt and is the biggest public owner, dropped to 91.5 cents, marking the biggest three-day decrease since June 4, according to prices compiled by Bloomberg. Because exchange-traded funds hold such a substantial portion of Caesars’ bonds, prices are more susceptible to volatility when money either moves into or out of those funds.

The company, taken private by affiliates of Leon Black’s Apollo Global Management LLC (APO:US) and David Bonderman’s TPG Capital for $30.7 in 2008, has reported 10 consecutive quarterly (CZR:US) net losses, according to data compiled by Bloomberg. Caesars had $22.7 billion in total debt (CZR:US) as of June 30, according to an Aug. 8 regulatory filing. The company’s bonds have an average weighted maturity of 5.7 years, Bloomberg data show.

Bonds of Las Vegas-based Caesars had seven trades of more than $1 million as of 11:03 a.m. New York time, Trace data show.

To contact the reporter on this story: David Holley in New York at dholley8@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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Companies Mentioned

  • CZR
    (Caesars Entertainment Corp)
    • $12.28 USD
    • -0.30
    • -2.44%
  • BLK
    (BlackRock Inc)
    • $325.69 USD
    • -2.63
    • -0.81%
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