Caesars strikes a deal with largest lenders over restructuring efforts

In a statement, Caesars said the agreement allows the company to focus on gaining support from the last major debt holder group that has yet to agree on the restructuring plan for Caesars Entertainment Operating Co.

Caesars said the company now has support for the CEOC restructuring from both first lien bank lenders and first lien bondholders. The group represents $12 billion of CEOC's debt.

In January, Caesars placed CEOC into Chapter 11 bankruptcy. It wants to convert the division into a real estate investment trust. The casinos operated by CEOC cover $18.4 billion of the company's gaming industry-high $22.8 billion of debt. The move would create two companies, a REIT owning the real estate and buildings and an operating company leasing back the casinos.

The restructuring is expected to trim almost $10 billion of debt from CEOC, which operates Caesars Palace, Caesars Atlantic City, Harrah's Reno Casino and Hotel and about dozen regional casinos.

Caesars has been trying to win creditor support for the CEOC restructuring ahead of a court-authorized investigation into the bankrupt operating unit. Earlier this week, Caesars said in a securities filing that the talks with several large banks had broken off. But that changed Friday night.

The company said it was still in talks with junior creditors to build additional support for the previously announced second lien restructuring agreement. Caesars said it wants to complete the restructuring consensually.

"However, the senior creditors' support of today's agreement paves the way toward a confirmable plan for the restructuring of CEOC," Caesars said.

Investors, acting on reports the talks had restarted, drove shares of Caesars up $1.15 or 16.74 percent to close Friday at $8.02 on the Nasdaq, making the company one of the day's top gainers. The increase was Caesars' best day on the market in a month.

Caesars is majority owned by private equity firms Apollo Global Management and TPG Capital, who originally took the company private in 2008 in a $31 billion leveraged buyout.