Caesars Selling $1.2 Billion Corporate Debt to Advance Its Rating


Caesars Entertainment (NASDAQ: CZR) on Friday last week announced the sale of $1.2 billion worth of corporate debt due in 2029 at 4.625 percent.

The deal is expected to commence on 24th September, with all signs indicating that the gaming giant commercial papers are in great demand. And Caesars could generate $200 million from the sale.

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According to Moody’s Investors Service, Caesar’s bonds maturing in 2025 are worth $1.7 billion. That means that the casino company can use the debt sale and some cash in hand to advance its credit rating.

Caesars’ debt sale also indicates that the casino company is enjoying easy access to capital. Apart from Caesars, Las Vegas Sands (NYSE: LVS) and VICI Properties (NYSE: VICI) are also embarking on a similar path.

Last week the sale of $1.95 billion of unsecured tranches. VICI Properties (NYSE: VICI) is also selling up to 115 million shares to fund the acquisition of Venetian, Sands Expo and Convention Center, and Palazzo.

In Caesars’ case, the sale of new notes may be attractive to corporate bond investors due to their attractive interest rate. They have low default risk.

Moody’s Investors Service believes the new sale of Caesars’ bond is a credit positive gesture and will extend the company’s debt maturity profile and reduce debt and leverage.

Moody rates Caesars as a company with a stable outlook. That outlook is reflected by company recovery in the second quarter of 2020. They also expected Caesars to continue with similar improvements in 2021.