Monday, December 15, 2014

Are They Going To Repo Caesars?

Wow, if you are going to do something, might as well do it big.
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.
The missed deadline didn't come as a surprise. Analysts and those watching the company's financial situation had predicted the likelihood Caesars wouldn't pay.
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.
$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.

1 comment:

  1. That's just the monthly vig to the second tier bond holders.

    Most 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.