Caesars stock posts strong gains in wake of restructuring announcement

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L.E. Baskow

Fountains and entrance about exterior of Caesars Palace on Wednesday, August 5, 2015.

Mon, Aug 24, 2015 (3:30 p.m.)

Amid global stock-market carnage today, shares of Caesars Entertainment Corp. bounced higher after the casino giant announced a restructuring deal with lenders.

Caesars and its largest unit, the bankrupt Caesars Entertainment Operating Co., or CEOC, reached an agreement that “secures the support” of the unit’s “largest and most senior creditor constituencies,” according to a news release Friday night.

It’s a “key milestone” in the company’s efforts “to implement a consensual restructuring of CEOC,” Caesars said.

That restructuring now is backed by lenders and bondholders who represent “the most senior $12 billion” of its capital structure, the news release said.

Las Vegas-based Caesars said it was still in talks with other creditors, but last week’s deal “paves the way toward a confirmable plan for the restructuring of CEOC.” The unit filed for Chapter 11 bankruptcy protection in January, sinking under $18.4 billion in debt.

The agreement is part of a plan to split CEOC into two parts: one that operates casinos and another that owns the casinos’ real estate.

Shares of Caesars Entertainment Corp. closed today at $8.98 apiece, up 96 cents, or 12 percent, from Friday, on news of the deal.

Stock-market performance gauges Dow Jones Industrial Average and S&P 500, on the other hand, dropped 3.6 percent and 3.9 percent, respectively, today. The losses came amid volatile trading and steep market declines in Asia and Europe.

The Dow at one point shed more than 1,000 points today, according to the Associated Press. It recouped some of those losses but ended Monday’s trading session down 588 points.

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