Caesars Entertainment Corp., the casino company taken private in a $30.7 billion leveraged buyout just before the credit crisis, has taken steps in recent weeks that signal that it’s poised for a massive debt restructuring that will saddle creditors with steep losses, Bloomberg reported today. “We expect that something is imminent,” Alex Bumazhny, a credit analyst with Fitch Ratings. Fitch, which has a CCC rating on Caesars that is reserved for borrowers where “default is a real possibility,” said that it expects the company to attempt a debt-for-equity exchange with a group of junior creditors. Caesars, with properties from Caesars Palace in Las Vegas to Harrah’s in Atlantic City, has had only one profitable year since 2008 as it struggles to service $21 billion of long-term debt amid a drop in consumer spending. Bondholders have suffered losses of $2.6 billion since September as the company gained regulatory approval for a refinancing that shielded valuable assets from lenders. Last week, advisors to a group that owns senior bonds of a Caesars unit entered into talks to restructure its borrowings. The events are putting Las Vegas-based Caesars on a path toward a $12.7 billion debt restructuring that pits Leon Black and David Bonderman, the buyout titans who took the company private with a $6 billion equity investment, against distressed-debt investors.
