US – Caesars fights back over default claimsBy Phil - 27 November 2014
Caesars Entertainment has slammed claims it has defaulted on certain senior secured notes as ‘meritless.’
The notice of default, the Caesar’s first from a first-lien creditor group, was filed on November 21 with the Securities and Exchange Commission. It also claimed that Caesars violated its rights when it sold and transferred assets.
Caesars however argued in a regulatory filing that UMB Bank’s suggestion that certain asset sales and transactions with affiliates violated covenants under the First Lien Noted Indenture, and therefore constitute defaults. Caesars highlighted that there were approximately $1.25bn of notes outstanding under the First Lien Notes Indenture. The operator said if its obligations under those notes were accelerated, it would have a material adverse effect on its business and financial condition, as it would lead to defaults under other notes. But Caesars stressed that it ‘does not believe that a default or an event of default has occurred.’
Caesars was taken private by Apollo Global Management LLC and TPG Capital in 2008 for $30.7bn. It has been trying to reorganise its debt with its lenders, including the possibility of turning into a real estate investment trust.