Debt

The following table presents our outstanding debt from a consolidated viewpoint. Accordingly, debt owed between consolidated entities is eliminated, and thus, is not considered outstanding. Therefore, it is excluded from the table below. See footnotes 3 and 5 to this table for greater detail.



Detail of Debt (Dollars in millions)	Final Maturity	Rate(s)	Face Value		Book Value		Book Value
		June 30, 2014					December 31, 2013
CEOC Debt
Credit Facilities⁽¹⁰⁾
Term Loans B1 - B3 ⁽¹⁾	2015	5.25%	$	29.0	$	29.0	$	29.0
Term Loan B4	2016	9.50%	955.0		945.0		948.1
Term Loan B5	2017	4.40% - 6.50%	991.9		989.6		989.3
Term Loan B6 ⁽²⁾	2017	5.40% - 7.50%	2,431.9		2,403.2		2,399.9
Term Loan B7 ⁽²⁾	2017	9.75%	1,750.0		1,736.9		—
Secured Debt
Senior Secured Notes	2017	11.25%	2,095.0		2,069.8		2,066.4
Senior Secured Notes	2020	8.50%	1,250.0		1,250.0		1,250.0
Senior Secured Notes	2020	9.00%	3,000.0		2,957.3		2,954.5
Second-Priority Senior Secured Notes	2018	12.75%	750.0		744.5		743.9
Second-Priority Senior Secured Notes	2018	10.00%	4,502.1		2,513.7		2,433.2
Second-Priority Senior Secured Notes	2015	10.00%	189.9		169.8		187.7
Chester Downs Senior Secured Notes	2020	9.25%	330.0		330.0		330.0
Capitalized Lease Obligations	to 2017	various	14.6		14.6		14.7
Subsidiary-Guaranteed Debt ⁽³⁾
Senior Notes	2016	10.75%	478.6		478.6		478.6
Senior PIK Toggle Notes	2018	10.75%/11.50%	11.5		11.5		10.9
Unsecured Senior Debt
5.625%⁽⁴⁾	2015	5.625%	364.4		340.3		328.3
6.5%	2016	6.50%	248.7		219.2		212.6
5.75%	2017	5.75%	147.9		118.5		115.0
Floating Rate Contingent Convertible Senior Notes	2024	0.24%	—		—		0.2
Other Unsecured Borrowings
Special Improvement District Bonds	2037	5.30%	46.9		46.9		48.1
Other	2016 - 2021	0.00% - 6.00%	37.0		37.0		39.3
Total CEOC Debt ⁽⁵⁾			19,624.4		17,405.4		15,579.7

CERP Debt
Secured Debt
CERP Senior Secured Loan ⁽⁶⁾	2020	7.00%	2,487.5		2,440.3		2,449.7
CERP Revolver ⁽⁶⁾	2018	8.25%	35.0		35.0		—
CERP First Lien Notes ⁽⁶⁾	2020	8.00%	1,000.0		994.0		993.7
CERP Second Lien Notes ⁽⁶⁾	2021	11.00%	1,150.0		1,141.2		1,140.8
Capitalized Lease Obligations	to 2017	various	12.3		12.3		5.4
Other Unsecured Borrowings
Other	2016	0.00% - 6.00%	17.7		17.7		21.3
Total CERP Debt			4,702.5		4,640.5		4,610.9



Detail of Debt (continued) (Dollars in millions)	Final Maturity	Rate(s)	Face Value			Book Value			Book Value
		June 30, 2014							December 31, 2013
CGP LLC Debt ⁽⁷⁾
Secured Debt
CGP Term Loan⁽⁹⁾	2021	6.25%	1,175.0			1,141.8			—
Second-Priority Senior Secured Notes ⁽⁹⁾	2022	9.375%	675.0			660.1			—
PHW Las Vegas Senior Secured Loan		—	—			—			456.1
Baltimore Credit Facility	2020	8.25%	262.5			252.6			214.5
Bill's Gamblin' Hall & Saloon ("Bill's) Credit Facility⁽⁸⁾	2019	11.00%	185.0			180.0			179.8
Capitalized Lease Obligations	to 2016	various	4.7			4.7			2.1
Other Unsecured Borrowing
Other	2014 - 2018	0.00% - 6.00%	58.0			56.7			57.6
Special Improvement District Bonds	2037	5.30%	14.5			14.5			14.8
Total CGP LLC Debt			2,374.7			2,310.4			924.9

Caesars Entertainment Other Unsecured Borrowing	2014	2.99%	1.5			1.5			—

Total Debt			26,703.1			24,357.8			21,115.5
Current Portion of Long-Term Debt			(148.3		)	(148.3		)	(197.1		)
Long-Term Debt			$	26,554.8		$	24,209.5		$	20,918.4

___________________


⁽¹⁾	These Term Loans were paid in full subsequent to June 30, 2014. See "Repayment of 2015 Maturities" section below.


⁽²⁾	The Term B7 Loans have a springing maturity to 90 days prior to March 1, 2017, if more than $500.0 million of our Term B5 and Term B6 Loans remain outstanding on such date.


⁽³⁾	Guaranteed by certain wholly owned subsidiaries of CEOC.


⁽⁴⁾	$784.9 million of $791.8 million in face value of this Unsecured Senior Debt was paid subsequent to June 30, 2014. See "Repayment of 2015 Maturities" section below. Approximately $427.3 million in face value of the 5.625% Notes due 2015 was held by CGP LLC, accordingly it is not presented as outstanding in the table above as Unsecured Senior Debt.

⁽⁵⁾

$1,146.8 million face value of debt issued by CEOC is held by other consolidated entities, substantially all of which is held by CGP LLC and $427.3 million was paid subsequent to June 30, 2014. See "Repayment of 2015 Maturities" section below. Accordingly, such debt is not considered outstanding in the above presentation. CEOC has an intercompany credit arrangement with CEC, the total outstanding amount of $260.4 million as of March 31, 2014 was repaid during the quarter ended June 30, 2014.


⁽⁶⁾	Guaranteed by Caesars Entertainment Resort Properties and its subsidiaries.


⁽⁷⁾	As of June 30, 2014 and December 31, 2013, under the CGP LLC debt structure, CIE has $39.8 million drawn under an arrangement with Caesars Entertainment. Accordingly, such debt is eliminated in consolidation.


⁽⁸⁾	The property that secured this debt was sold to CGP LLC in May 2014. See Note 5, "Property Transaction between CEOC and CGP LLC and Related Financing."


⁽⁹⁾	Guaranteed by an indirect subsidiary of Caesars Growth Partners, LLC and certain wholly owned subsidiaries of it.


⁽¹⁰⁾	Guaranteed by Caesars Entertainment.

As of June 30, 2014 and December 31, 2013, book values of debt are presented net of unamortized discounts of $2,345.3 million and $2,473.8 million, respectively.

As of June 30, 2014, our outstanding debt had a fair value of $22,245.7 million and a carrying value of $24,357.8 million. We calculated the fair value of the debt based on borrowing rates available as of June 30, 2014, for debt with similar terms and maturities, and based on market quotes of our publicly traded debt. We classify the fair value of debt within level 1 and level 2 in the fair value hierarchy.

CEOC Debt

Repayment of 2015 maturities

On July 29, 2014, Caesars Entertainment announced that CEOC had completed its previously announced cash tender offers for any and all of its 5.625% Senior Notes due 2015 and any and all of its 10.00% Second-Priority Senior Secured Notes due 2015. CEOC received tenders from the holders of $44.4 million aggregate principal amount of the 5.625% Notes and $103.0 million aggregate principal amount of the 10.00% Notes by the expiration time. CEOC has accepted for purchase all of the notes validly tendered (and not validly withdrawn). CEOC has paid total consideration of $1,048.75 per $1,000 principal amount of the 5.625% Notes and total consideration of $1,022.50 per $1,000 principal amount of the 10.00% Notes, plus any accrued and unpaid interest from the last interest payment date to, but not including, the payment date. In addition, pursuant to previously announced note purchase agreements with a significant third-party holder and a subsidiary of CGP LLC, CEOC purchased approximately $740.5 million in aggregate principal amount of the 5.625% Notes for a purchase price of $1,048.75 per $1,000 principal amount and approximately $83.2 million in aggregate principal amount of the 10.00% Notes for a purchase price of $1,022.50 per $1,000 principal amount, in each case, plus accrued and unpaid interest to, but not including, the closing date. As a result of the tender offers and the note purchases, CEOC retired approximately 99.1% of the outstanding amount of the 5.625% Notes and approximately 98.0% of the outstanding amount of the 10.00% Notes.

Bank Transactions

On July 25, 2014, CEOC announced it had closed on amendments to its senior secured credit facilities that, upon their closing, provided for the following (collectively, the "Bank Amendment"):


(i)	a modification of the financial maintenance covenant to increase the SSLR from a ratio of 4.75 to 1.0 to a ratio of 7.25 to 1.0 on a retroactive basis to 2008, accordingly this change is effective for our June 30, 2014 covenant compliance determination;


(ii)	exclusion of the Incremental Term Loans incurred after March 31, 2014 from the definition of SSLR for purposes of such covenant to bring the amount of senior notes excluded for SSLR covenant purposes from $3,700.0 million to $5,450.0 million;


(iii)	a modification of CEC’s guarantee under the senior secured credit facilities such that CEC’s guarantee is limited to a guarantee of collection with respect to obligations owed to the lenders who consent to the Bank Amendment; and


(iv)	a modification of certain other provisions of the senior secured credit facilities.

In addition, CEOC repaid approximately $794.6 million of outstanding term loans held by consenting lenders at par upon closing of the Bank Amendment.

CEOC Credit Facilities Activity

In June 2014, CEOC completed the offering of $1,750.0 million of incremental term loans ("Incremental Term Loans") due March 1, 2017, with a springing maturity to 90 days prior to March 1, 2017, if more than $500.0 million of CEOC's Term B5 or Term B6 Loans remain outstanding on such date. The net proceeds of the Incremental Term Loans were deposited in escrow and remained in escrow until all the escrow conditions were satisfied on July 25, 2014. The Incremental Term Loans require scheduled quarterly repayments of $4.4 million beginning in the third quarter of 2014.

As of June 30, 2014, CEOC's Credit Facilities provide for senior secured financing of up to $6,263.9 million, consisting of (i) senior secured term loan facilities in an aggregate principal amount of $6,157.8 million and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $106.1 million, including both a letter of credit sub-facility and a swingline loan sub-facility. There were no amounts outstanding under the revolving credit facility as of June 30, 2014 or December 31, 2013. The term loans under CEOC's Credit Facilities currently require scheduled quarterly payments of $2.5 million, excluding the Incremental Term Loans, with the balance due at maturity. Quarterly repayments increase to $11.1 million in first quarter 2015, excluding the Incremental Term Loans. As of June 30, 2014, the senior secured term loans are comprised of $29.0 million maturing January 2015, $955.0 million maturing October 2016, and $3,423.8 million maturing January 2018, excluding the Incremental Term Loans. Certain of these maturities were repaid in July 2014 as described in "Repayment of 2015 Maturities" described above. As of June 30, 2014, $106.1 million of the revolving credit facility matures January 28, 2017 and $99.2 million is committed to outstanding letters of credit. After consideration of the letter of credit commitments, $6.9 million of additional borrowing capacity was available to the Company under its revolving credit facility as of June 30, 2014.

CEOC Notes Activity

Our Senior Secured Notes, including the Second-Priority Senior Secured Notes, and our unsecured debt, which is fixed-rate debt, have semi-annual interest payments.

If we were to exceed the SSLR, which could be an event of default under our Credit Facilities, as amended, under certain circumstances, we are allowed to apply any cash contributions received from CEC as an increase to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted, in order to cure any breach.

Based upon the effects of the Bank Amendment and our current operating forecast, including our ability to cure a breach of the SSLR, in certain circumstances, with cash contributions from CEC, we believe that we will have sufficient liquidity to fund our operations and meet our debt service obligations and that we will continue to be in compliance with the SSLR during the foreseeable future.

Restrictive Covenants and Other Matters

Under CEOC's Credit Facilities as amended by the Bank Amendment, we are required to satisfy and maintain specified financial ratios. Failure to comply with these covenants can result in limiting our long-term growth prospects by hindering our ability to incur future indebtedness or grow through acquisitions, or cause an event of default. Through June 30, 2014, the CEOC Credit Facilities required CEOC to maintain an SSLR of no more than 7.25 to 1.0, which is the ratio of CEOC's senior first priority secured debt to last twelve months ("LTM") Adjusted EBITDA - Pro Forma - CEOC Restricted. This ratio excluded up to $3,700.0 million of first priority senior secured notes and up to $350.0 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly owned. This ratio also reduces the amount of senior first priority secured debt by the amount of unrestricted CEOC cash on hand, which was $2,146.6 million as of June 30, 2014. As of June 30, 2014, CEOC's SSLR was 4.61 to 1.0. Subsequent to the Bank Amendment described above, the ratio will also exclude the $1,750.0 million of Incremental Term Loans.

In addition to requiring compliance with a maximum net senior secured first lien debt leverage test, the CEOC Credit Facilities include negative covenants, subject to certain exceptions, restricting or limiting CEOC’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur additional debt; (ii) create liens on certain assets; (iii) enter into sale and lease-back transactions; (iv) make certain investments, loans, and advances; (v) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (vi) pay dividends or make distributions or make other restricted payments; (vii) enter into certain transactions with its affiliates; (viii) engage in any business other than the business activity conducted at the closing date of the loan or business activities incidental or related thereto; (ix) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements or make certain payments or modifications of indebtedness; and (x) designate or permit the designation of any indebtedness as "Designated Senior Debt."

We were in compliance with the terms and conditions of all of our loan agreements, including CEOC’s Credit Facilities and indentures as of June 30, 2014, as described above, after giving effect to the Bank Amendment, which increased the allowable SSLR to 7.25 to 1.0 from 4.75 to 1.0. As a result, and together with the terms of the Bank Amendment, we have a significant amount of room available under the SSLR and expect to continue to be in compliance with the CEOC SSLR during the foreseeable future.

Caesars Entertainment is not bound by any financial or negative covenants contained in CEOC’s credit agreement.

All borrowings under the CEOC Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default, the accuracy of representations and warranties, and the requirement that such borrowing does not reduce the amount of obligations otherwise permitted to be secured under the CEOC Credit Facilities without ratably securing the retained notes.

The indenture and other agreements governing our cash pay debt and PIK toggle debt limit our (and most of our subsidiaries’) ability to among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends or make distributions in respect of our capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) engage in any business or own any material asset other than all of the equity interest of CEOC so long as certain investors hold a majority of the notes; (vi) create or permit to exist dividend and/or payment restrictions affecting its restricted subsidiaries; (vii) create liens on certain assets to secure debt; (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (ix) enter into certain transactions with its affiliates; and (x) designate its subsidiaries as unrestricted subsidiaries. Subject to certain exceptions, the indenture governing the notes and the agreements governing the other cash pay debt and PIK toggle debt will permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness.

CERP Debt

CERP Financing

In October 2013, CERP (i) completed the offering of $1,000.0 million aggregate principal amount of 8.0% first-priority senior secured notes due 2020 and $1,150.0 million aggregate principal amount of 11.0% second-priority senior secured notes due 2021 (together with the 8.0% first-priority senior secured notes due 2020, the "CERP Notes") and (ii) entered into a first lien credit agreement governing a 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 ("CERP Term Loans") and a senior secured revolving credit facility in an aggregate principal amount of up to $269.5 million (collectively, "Senior Secured Credit Facilities"). CERP pledged a significant portion of its assets as collateral under the Senior Secured Credit Facilities and the CERP Notes. The CERP Term Loans require scheduled quarterly payments of $6.3 million, with the balance due at maturity. As of June 30, 2014, there was $35.0 million in borrowings outstanding under the senior secured revolving credit facility, and no amounts were committed to outstanding letters of credit.

CERP Restrictive Covenants

The CERP Notes and CERP Term Loans include negative covenants, subject to certain exceptions, restricting or limiting the ability of CERP and operating companies under the CERP Financing to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create liens on certain assets to secure debt; (vi) consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets; (vii) enter into certain transactions with their affiliates; and (viii) designate their subsidiaries as unrestricted subsidiaries.

The CERP Term Loans also contain certain customary affirmative covenants and require that CERP maintains an SSLR of no more than 8.00 to 1.00, which is the ratio of first lien senior secured net debt to earnings before interest, taxes, depreciation and amortization, adjusted as defined ("CERP Adjusted EBITDA"). This ratio also reduces the amount of first lien senior secured net debt by the amount of unrestricted cash on hand, for a test period. As of June 30, 2014, CERP's SSLR was 6.10 to 1.00.

CGP LLC Debt

CEOC-CGP LLC Property Transaction Notes

On April 17, 2014, subsidiaries of CGP LLC (the "Issuers") completed the offering of $675.0 million aggregate principal amount of their 9.375% second-priority senior secured notes due May 1, 2022. The Issuers will pay interest on the CEOC-CGP LLC Property Transaction Notes at 9.375% per annum, semi-annually commencing in November 2014.

The Issuers may redeem the CEOC-CGP LLC Property Transaction Notes at their option, in whole or part, at any time prior to May 1, 2017, at a price equal to 100% of the principal amount of the CEOC-CGP LLC Property Transaction Notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole" premium. The Issuers may redeem the CEOC-CGP LLC Property Transaction Notes, in whole or in part, on or after May 1, 2017, at the redemption prices set forth in the indenture governing the CEOC-CGP LLC Property Transaction Notes (the "Indenture"). In addition, at any time and from time to time on or before May 1, 2017, the Issuers may choose to redeem in the aggregate up to 35% of the original aggregate principal amount of the CEOC-CGP LLC Property Transaction Notes (calculated after giving effect to the issuance of additional notes) at a redemption price equal to 109.375% of the principal amount thereof with the net proceeds of one or more equity offerings so long as at least 50% of the original aggregate principal amount of the CEOC-CGP LLC Property Transaction Notes (calculated after giving effect to any issuance of additional notes) remain outstanding after each such redemption.

The CEOC-CGP LLC Property Transaction Notes are senior secured obligations of the Issuers and rank equally and ratably in right of payment with all existing and future senior obligations and senior to all future subordinated indebtedness. Upon the release of funds from the Escrow Account, the CEOC-CGP LLC Property Transaction Notes will be guaranteed on a senior secured basis by subsidiaries of Caesars Growth Properties Holding, LLC (a CGP LLC subsidiary, and an Issuer) that are guarantors of a new senior secured credit facility to be entered into in connection with the CEOC-CGP LLC Property Transaction, and secured by a second-priority security interest, subject to permitted liens, in certain assets of the Issuers and such subsidiary guarantors. None of CGP LLC, CEC or CEOC will guarantee the CEOC-CGP LLC Property Transaction Notes.

The Indenture contains customary covenants that limit the Issuers’ (and their restricted subsidiaries’) ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting their restricted subsidiaries; (vi) create liens on certain assets to secure debt; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; (viii) enter into certain transactions with their affiliates; and (ix) designate their subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important limitations and exceptions outlined in the Indenture. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding CEOC-CGP LLC Property Transaction Notes to be immediately due and payable.

Registration Rights Agreement - In connection with the issuance of the CEOC-CGP LLC Property Transaction Notes, the Issuers agreed to use their commercially reasonable efforts to register with the Securities and Exchange Commission notes having substantially identical terms as the CEOC-CGP LLC Property Transaction Notes on or prior to 365 days after the issue date of the CEOC-CGP LLC Property Transaction Notes, and effect and exchange of the CEOC-CGP LLC Property Transaction Notes for the newly registered notes.

If the Issuers fail to meet the targets for the registration and exchange of notes, the annual interest rate on the CEOC-CGP LLC Property Transaction Notes will increase by 0.25%. The annual interest rate on the CEOC-CGP LLC Property Transaction Notes will increase by an additional 0.25% for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per year. If the registration default is corrected, the interest rate of the CEOC-CGP LLC Property Transaction Notes will revert to the original level.

First Closing Term Loan

On May 5, 2014, an indirect subsidiary of CGP LLC also entered into a $700.0 million term facility that, along with CGP LLC cash on hand, funded the purchase price of the First Closing for the Nevada Properties. This term loan was subsequently repaid in full in conjunction with the Second Closing of the CEOC-CGP LLC Property Transaction.

CGP First Lien Credit Facilities

On May 8, 2014, the Issuers entered into a First Lien Credit Agreement providing for a $1,175.0 million term loan (the "CGP Term Loan") and a $150.0 million revolving facility (the "CGP Revolving Credit Facility"). The CGP Term Loan matures in 2021 and requires quarterly payments in amounts equal to 0.25% of the original aggregate principal amount, with the balance due at maturity. As of June 30, 2014, no borrowings were outstanding under the CGP Revolving Credit Facility, and $0.1 million is committed to outstanding letters of credit.

Borrowings under this agreement bear interest at a rate equal to, at the Issuers’ option, either:


(a)	LIBOR determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a floor of 1.00% in the case of term loans or


(b)	a base rate determined by reference to the highest of:


(i)	the federal funds rate plus 0.50%,


(ii)	the prime rate as determined by the administrative agent under the Credit Agreement, and


(iii)	the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be 5.25% per annum for LIBOR Loans and 4.25% per annum for base rate loans, subject to step downs with respect to the revolving loans based on the Borrower’s SSLR.

In addition, on a quarterly basis, the Issuers are required to pay each lender under the CGP Revolving Credit Facility a commitment fee in respect of any unused commitments under the CGP Revolving Credit Facility. The Issuers are also required to pay customary agency fees as well as letter of credit participation and other fees.

PHWLV, LLC Senior Secured Loan

In conjunction with the closing of the CEOC-CGP LLC Property Transaction, CGP LLC used $476.9 million of the net proceeds from the CGP Term Loan to repay all amounts outstanding under the senior secured term loan of PHWLV, LLC and we recognized a $27.5 million loss on early extinguishment of debt.

CIE Convertible Notes

During 2012, CIE issued to Rock Gaming two non-interest bearing convertible promissory notes totaling $47.7 million. The promissory notes are convertible into approximately 8,913 shares of CIE common stock. During the three months ended June 30, 2014, the majority of notes were extended to November 2014.