06.12.2012 00:04
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Octavius Borrower -- Moody's assigns a B2 rating to Caesars' $300 million senior secured notes; changes outlook to negative

New York, December 05, 2012 -- Moody's Investors Service assigned a B2 rating to the proposed $300 million senior secured notes due 2020 issued by Caesars Operating Escrow LLC and Caesars Escrow Corporation due 2020 to be assumed by Caesars Entertainment Operating company, Inc. (CEOC). Moody's affirmed Caesars Entertainment Corporation's (Caesars) Caa1 Corporate Family Rating and changed the rating outlook to negative. Additionally, Moody's lowered Caesars' Speculative Grade Liquidity rating (SGL) to SGL-2 from SGL-1.

RATINGS RATIONALE

The change in rating outlook to negative reflects our view that Caesars' operating results will not meet Moody's previous expectations as a result of slowing same store gaming revenues through August across many regional U.S. markets in which Caesars participates followed by declines in September and October. While the Las Vegas region (about 40%% of property EBITDA) is holding its own, a number of key regional markets, including Atlantic City, Mississippi/Louisiana, and Indiana/Illinois (collectively about 36% of property EBITDA) have reported declining gaming revenues in September and October. Moody's is concerned that US consumer spending on gaming will remain under pressure in 2013 given generally soft economic data and fiscal tightening making it difficult for Caesars to increase earnings and improve debt/EBITDA to the mid-point of Moody's range of 10.5 times. On an trailing twelve month basis through September 30, 2012, debt/EBITDA was 11.9 times and EBITDA/interest was 0.9 times.

The downgrade of Caesars' SGL rating reflects a decline in revolver commitments to about $520 million as a result of amend and extend transactions whereby lenders converted unused revolver commitment into term loans in exchange for a 50% reduction in the committed amount. This revolving capacity is thin relative to the scale of the company's operations and its negative free cash position. Nevertheless, Caesars' cash balances along with remaining revolver availability is sufficient availability to enable the company to meet its near term obligations for interest, capital spending and debt maturities that Moody's estimates to be in aggregate approximately $2.7 billion in 2013.

Caesars' Caa1 Corporate Family Rating reflects the company's high leverage (consolidated debt/EBITDA of 11.9 times), and low interest coverage (EBITDA/interest expense of around 0.9 times), tempered by good liquidity. Caesars' Caa1 rating also recognizes the risk that the company may again pursue transactions that Moody's would consider to be distressed exchanges particularly in light of large debt maturities of about $6.5 billion in 2015 (including CMBS debt).

Ratings assigned:

Caesars Operating Escrow LLC and Caesars Escrow Corporation due 2020 to be assumed by Caesars Entertainment Operating company, Inc.

Approximately $300 million senior secured notes due 2020 at B2 (LGD 3, 31%)

Ratings affirmed and assessments updated where applicable:

Caesars Entertainment Corporation

Corporate Family Rating at Caa1

Probability of Default Rating at Caa1

Caesars Entertainment Operating Company, Inc. (CEOC)

Senior secured guaranteed revolving credit facility at B2 (LGD 3, 31% from 30%)

Senior secured guaranteed term loans at B2 (LGD 3, 31% from 30%)

Senior secured notes at B2 (LGD 3, 31% from 30%)

Senior unsecured guaranteed by operating subsidiaries and CEC at Caa3 (LGD 6, 93% from 92%)

Senior unsecured debt guaranteed by CET at Caa3 (LGD 6, 95%)

Harrah's Operating Escrow LLC and Harrah's Escrow Corporation assumed by CEOC

Senior secured notes at B2 (LGD 3, 31% from 30%)

Senior secured second priority notes at Caa2 (LGD 5, 82% from 80%)

Corner Investment Propco, LLC

$180 million senior secured 7-year term loan at B2 (LGD 3, 31% from 30%)

Octavius Borrower

$450 million senior secured term loan at B2 (LGD 3, 31% from 30%)

Rating downgraded:

Speculative Grade Liquidity rating to SGL-2 from SGL-1

Caesars' ratings could be downgraded if its liquidity position deteriorates, if recent negative trends in monthly gaming revenue in the company's major markets continue to decline or if credit metrics fail to improve from current levels. Given Caesars' high leverage and weak interest coverage and the need to address significant debt maturities in 2015, we do not anticipate upward rating momentum in the absence of a material reduction in leverage.

The principal methodology used in rating Caesars Entertainment Corporation was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Caesars Entertainment Corporation, through its wholly-owned subsidiary, CEOC, owns or manages approximately 50 casinos. The company generates consolidated revenues of about $9 billion annually.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

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Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Peggy Holloway VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Kendra M. Smith MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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Analysen zu Caesars Entertainment Corp.

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16.10.2006Update Harrah's Entertainment Inc.: BuyKeyBanc Capital Markets / McDonald
26.09.2006Update Harrah's Entertainment Inc.: NeutralJP Morgan
22.09.2006Update Harrah's Entertainment Inc.: OutperformWachovia Sec
12.09.2006Harrah's addCalyon Securities
16.06.2006Update Harrah's Entertainment Inc.: HoldDeutsche Securities
16.10.2006Update Harrah's Entertainment Inc.: BuyKeyBanc Capital Markets / McDonald
22.09.2006Update Harrah's Entertainment Inc.: OutperformWachovia Sec
12.09.2006Harrah's addCalyon Securities
13.04.2006Update Harrah's Entertainment Inc.: BuyCalyon Securities
21.03.2006Harrah's aggressive buyKeyBanc Capital Markets / McDonald
26.09.2006Update Harrah's Entertainment Inc.: NeutralJP Morgan
16.06.2006Update Harrah's Entertainment Inc.: HoldDeutsche Securities
28.04.2006Update Harrah's Entertainment Inc.: UnderweightPrudential Securities
27.10.2005Update Harrah's Entertainment Inc.: HoldKeyBanc Capital Markets / McDonald
27.10.2005Harrah's DowngradeKeyBanc Capital Markets / McDonald
Keine Nachrichten im Zeitraum eines Jahres in dieser Kategorie verfügbar.
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Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Caesars Entertainment Corp. nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
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