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Subsequent Events
9 Months Ended
Sep. 30, 2013
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events
Common Stock Issuance
On September 25, 2013, Caesars entered into an underwriting agreement for the sale of 10.0 million shares of its common stock, par value $0.01 per share. The underwriter agreed to purchase the common stock from Caesars at a price of $19.40 per share, which resulted in $194.0 million of proceeds to Caesars before expenses. On September 27, 2013, the underwriter exercised its option to purchase 340,418 additional shares of common stock, resulting in an approximately $6.6 million of additional proceeds to Caesars before expenses. These transactions closed on October 1, 2013, and resulted in approximately $200.6 million of proceeds to Caesars before expenses.
Closing of Caesars Acquisition Company / Caesars Growth Partners Transactions
On October 21, 2013, Caesars distributed to its stockholders as of the October 17, 2013 record date subscription rights to purchase common stock of CAC in connection with a rights offering.
In addition, on that date, CAC, Growth Partners and Caesars and its subsidiaries consummated the transaction. Affiliates of Apollo and TPG exercised their basic subscription rights in full to purchase $457.8 million worth of CAC’s Class A common stock at a price of $8.64 per whole share. CAC used such proceeds to acquire all of the voting units of Growth Partners. In connection with this transaction, CAC and Growth Partners entered into agreements with CEOC and its subsidiaries to provide certain corporate services and back-office support and business advisory services to CAC, Growth Partners and their subsidiaries.
In connection with this transaction, Caesars contributed all of the shares of CIE's outstanding common stock held by a subsidiary of Caesars and approximately $1.1 billion in aggregate principal amount of senior notes previously issued by CEOC that are owned by another subsidiary of Caesars in exchange for non-voting units of Growth Partners. Additionally, Growth Partners used $360.0 million of proceeds received from CAC to purchase Planet Hollywood Resort & Casino in Las Vegas, Caesars’ joint venture interests in a casino under development in Baltimore ("Horseshoe Baltimore") and a 50% interest in the management fee revenues for both of those properties. A subsidiary of Growth Partners assumed the $513.2 million of outstanding secured term loan related to Planet Hollywood in connection with the purchase.
Caesars, through its subsidiaries, owns approximately 79% of the economic interests of Growth Partners at the time of the October 21, 2013 closing.
On October 29, 2013, the Company announced that each of Apollo and TPG intend to exercise over-subscription privileges for up to approximately $71.1 million, for a total of approximately $142.2 million worth of additional CAC Class A common stock.
Refinancing of CMBS and Linq/Octavius
On October 11, 2013, Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance, Inc., Harrah’s Atlantic City Holding, Inc., Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding, LLC and Rio Properties, LLC, each a wholly owned subsidiary of Caesars, (i) completed the offering of $1,000 million aggregate principal amount of their 8% first-priority senior secured notes due 2020 and $1,150 million aggregate principal amount of their 11% second-priority senior secured notes due 2021 (together with the 8% first-priority senior secured notes due 2020, the “Notes”) and (ii) entered into a first lien credit agreement governing their new $2,769.5 million senior secured credit facilities, consisting of senior secured term loans in an aggregate principal amount of $2,500.0 million (the “Term Loans”) and a senior secured revolving credit facility in an aggregate principal amount of up to $269.5 million. We refer to this new borrowing structure as Caesars Entertainment Resort Properties ("CERP").
The net proceeds from the offering of Notes and the borrowings under the Term Loans, together with cash on hand at the time, was used to retire 100% of the principal amount of loans under the mortgage and mezzanine loan agreements entered into by certain subsidiaries of the CMBS properties, repay in full all amounts outstanding under the senior secured credit facility entered into by Caesars and Caesars Linq, LLC and Caesars Octavius, LLC, each an indirect subsidiary of Caesars, and to pay related fees and expenses.
Recent Developments at Suffolk Downs Joint Venture
Caesars holds a minority equity ownership, including both common and preferred stock interests, in Sterling Suffolk. In addition, we have a $60.0 million intangible asset representing the right to manage a potential future gaming facility. Sterling Suffolk recently made a bid for a casino license at its facility. On October 18, 2013, Caesars received a report issued to the Massachusetts Gaming Commission from the Director of the Investigations and Enforcement Bureau for the Massachusetts Gaming Commission which raised certain issues for consideration when evaluating our suitability as a qualifier in Massachusetts. As a result, Caesars has withdrawn its application as a qualifier in Massachusetts for the benefit of Sterling Suffolk. While it is too early to determine the resolution regarding the Company’s investment in this project, the approximate cash investment is $100 million as of September 30, 2013.
Claridge Hotel Tower Sale
In October 2013, the Company entered into an agreement to sell its 500-room Claridge Hotel Tower in Atlantic City.
Macau Land Concession
On November 1, 2013, the Company completed the sale of all of the equity interests of the subsidiaries that hold the Macau Land Concession to Pearl Dynasty for a total sales price of $438.0 million. The total sales price is inclusive of $65.7 million of deposits received by the Company during the third quarter of 2013. Net proceeds from the sale, after commissions and customary closing costs, amounted to approximately $420 million.