Caesars Entertainment has closed a new $3bn credit facility to reduce its interest expenses on loaned cash during the current period of macroeconomic uncertainty.
The $3bn loan – which is due in 2028 – consists of a $750m senior secured term loan and a new $2.25bn senior secured revolving credit facility.
A credit facility is a type of loan made in a business context that allows the borrowing company – in this case Caesars – to borrow money over a prolonged period, instead of forcing it to reapply for a loan every time it needs capital.A major benefit is that a credit facility allows for greater flexibility over a traditional loan.
With the agreement closed, Caesars has retired its existing revolving credit facility and will use the proceeds of the new senior secured term loan to prepay $750m of Caesars Resort Collection’s existing loan, which is due to be repaid in December 2024.
Caesars CFO Bret Yunker said: “We are excited to complete this new financing and greatly appreciate the support of our 16 domestic and international banking partners.Caesars CFO Bret Yunker: “This refinancing transaction will reduce interest expense while also extending debt maturities.”
Latham & Watkins, LLP served as legal counsel for Caesars and JPMorgan will continue to serve as the company’s administrative agent.
Higher borrowing costs are increasingly having an impact on the iGaming sector as among other factors, Russia’s war in Ukraine has triggered a global increase in the cost of energy.
Several SPAC listings have since fallen by the wayside, including the combination between Allwyn and Cohn Robbins Holdings Corp, while other companies have moved to reorganise their debt positions.