Caesars Entertainment Corp. refinanced the existing debt at its wholly owned subsidiaries Caesars Entertainment Resort Properties LLC and Caesars Growth Properties Holdings LLC and merged the two units into a new entity named Caesars Resort Collection LLC, which entered into $5.7 billion of new senior secured credit facilities.
The refinancing will lower Caesars' expected annual interest expense by $290 million, CEO Mark Frissora said in a release.
The new credit facilities comprise a five-year $1.0 billion senior secured revolving credit facility, of which $300 million will be drawn at close, and a seven-year $4.7 billion senior secured term loan credit facility. The term loan bears interest at the London Interbank Offered Rate plus 275 basis points, and the revolving credit facility bears interest at LIBOR plus 225 basis points. The revolver will be subject to a 50-basis-point fee on commitments.
The $1.7 billion of gross proceeds from an offering by two Caesars subsidiaries and the term loan, plus $171 million of cash on hand, were used to repay $675.0 million in aggregate principal amount of 9.375% second-priority notes due 2022 plus accrued interest, as well as $1.0 billion of 8% first-priority senior secured notes due 2020 and $1.15 billion of 11% second-priority senior secured notes due 2021, plus accrued interest.
Upon the Dec. 21 expiration of certain tender offers, Caesars Growth Properties accepted for purchase $358 million of the 9.375% second-priority notes, and Caesars Entertainment Resort Properties accepted for purchase $467 million of the 8% first-priority senior secured notes and $559 million of the 11% second-priority senior secured notes.
Caesars Growth Properties and Caesars Entertainment Resorts Properties announced the redemption of the remaining outstanding notes, with the redemption set for Jan. 22, 2018.