From the Las Vegas Sun:
Caesars Entertainment Corp. on Monday missed a $225 million interest payment it owes some of its creditors, giving the company 30 days to pay it or default.
A company official said in a financial filing that the company wouldn't pay the $225 million its debt-heavy operations division owes because it was still negotiating with senior creditors for a deal that would restructure the division's debt.
Alex Bumazhny with Fitch Ratings said days before that it was likely the company would miss it since it's a payment to the operating division's junior creditors. The company's decision was predicated on how much time it wanted to buy to keep negotiating a deal with its first-in-line creditors to restructure finances ahead of a potentially messy bankruptcy filing, he said.
http://www.lasvegassun.com/news/2014/dec/15/caesars-misses-225-million-interest-payment/
$225,000,000 is a huge payment to miss, and that's just the interest. Can't imagine how much the principal+interest payment would be.
My guess is that Caesars will file for bankruptcy and get rid of the union contracts and a lot of their debt.
That's just the monthly vig to the second tier bond holders.
ReplyDeleteMost of the notes were taken out in 2007-08 at 9-10% interest. The day of reckoning has come - I've been warning my clients that do business with Caesars to get the accounts receivables under control, since Chapter 11 will be filed on January 15. One of my clients had $2 million in open invoices earlier in the year, which they would have lost in the event of Ch. 11 filing.
Personally, I hope the company breaks up. Horrible management, horrible ethics.