Caesars Entertainment Corp. (CZR:US), the largest U.S. casino owner, set the rate on a $3 billion term loan it’s seeking to refinance borrowings, according to a person with knowledge of the transaction.
The seven-year debt will pay interest at 5.5 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark, said the person, who asked not to be identified because the terms aren’t set. Lenders are being offered the loan at 99 cents on the dollar.
The most indebted U.S. gaming company, which is controlled by Apollo Global Management LLC (APO:US) and TPG Capital, plans to use the proceeds to repurchase commercial mortgage-backed securities and refinance a $450 million senior secured facility, according to a Sept. 18 regulatory filing. The Las Vegas-based company also is selling $1.85 billion of notes in a two-part sale.
Citigroup Inc., Bank of America Corp., Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co., Goldman Sachs Group Inc., Macquarie Group Ltd, Morgan Stanley and UBS AG are arranging the bank-debt financing, which includes a $269.5 million revolving line of credit, the person said. Lenders must let the banks know by Sept. 27 at 12 p.m. in New York whether they will participate in the deal.
As of June 30, Caesars had about $4.4 billion of loans outstanding under the CMBS facilities, according to the filing.
In a revolving line of credit, money may be borrowed again once it’s repaid; in a term loan it can’t.
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