arrah’s got unanimous consent to push back repayments on loans that had been packaged and sold as commercial mortgage- backed securities, the Las Vegas-based company said today in a statement. Harrah’s can repurchase the loans, which cover six casinos, at a discount under the amendments.
The agreement buys Chairman and CEO Gary Loveman time to reduce debt as he works to boost earnings in Las Vegas and Atlantic City, where a record two-year slump lingers. Since Leon Black’s Apollo Management LP and TPG Inc. took the company private in January 2008, the owner of Caesars Palace and Paris casinos has cut $4.2 billion in debt by twice offering creditors new notes with later maturities for lesser principal.
“We now have basically five years with no material maturities,” Chief Financial Officer Jonathan Halkyard said today in a phone interview. “We obviously don’t know how quickly the economy rebounds, and given that uncertainty it’s critical we have plenty of time for that to play out.”
Harrah’s agreed to buy back us$ 124 million face-value CMBS loans for us$ 37 million under this latest amendment, and will pay lenders another us$ 48 million for us$ 950 million of loans it had previously acquired at a discounted price of us$ 237 million. The amendments are subject to final documentation.
The company now has about us$ 385 million debt repayments due through 2011, Halkyard said. The company’s us$ 1.63 billion revolving credit facility matures in January 2014, Bloomberg data show.
The extended CMBS loans had been due to mature in early 2013. The six mortgages are on Las Vegas resorts Paris, Rio, Harrah’s, and Flamingo, and Harrah’s-branded casinos in Atlantic City and Laughlin, Nevada, Halkyard said.
Apollo Management and TPG took Harrah’s private for us$ 30.7 billion including debt and transaction costs, just as the recession hurt the company’s biggest gambling and resort markets. Harrah’s had us$ 19.3 billion long-term debt as of September 30, regulatory filings show.