Debt



	June 30, 2017						December 31, 2016
(In millions)	Face Value			Book Value			Book Value
CERP	$	4,564		$	4,515		$	4,563
CGP	2,322			2,277			2,275
Total debt	6,886			6,792			6,838
Current portion of long-term debt	(48		)	(48		)	(89		)
Long-term debt	$	6,838		$	6,744		$	6,749

Unamortized discounts and deferred finance charges				$	94		$	110
Fair value	$	7,140

Current Portion of Long-Term Debt

CERP’s current portion of long-term debt is $26 million, which includes scheduled principal payments on its senior secured loan, other unsecured borrowings, and capitalized lease obligations. CGP’s current portion of long-term debt is $22 million, which includes scheduled principal payments on term loans, special improvement district bonds, and various capital lease obligations.

Although there are no outstanding amounts under the revolving credit facilities for CERP or CGPH as of June 30, 2017, borrowings under these revolving credit facilities are each subject to separate note agreements executed based on the provisions of the applicable credit facility agreements, and each note has a contractual maturity of less than one year. The applicable credit facility agreements each have a contractual maturity of greater than one year, and we have the ability to rollover the outstanding principal balances on a long-term basis. Amounts borrowed under the revolving credit facilities are intended to satisfy short term liquidity needs and are classified as current.

Fair Value

We calculate the fair value of debt based on borrowing rates available as of June 30, 2017, 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.

Estimated Debt Service Payments ⁽¹⁾

	Remaining		Years Ended December 31,
(In millions)	2017		2018		2019		2020		2021		Thereafter		Total
Long-Term Debt Principal
CERP	$	13	$	34	$	78	$	3,288	$	1,151	$	—	$	4,564
CGP ⁽²⁾	22		21		17		17		1,272		973		2,322
Total principal	35		55		95		3,305		2,423		973		6,886

Estimated Interest
CERP	160		330		330		300		130		—		1,250
CGP ⁽²⁾	70		140		140		150		110		80		690
Total interest	230		470		470		450		240		80		1,940

Principal and Interest
CERP	173		364		408		3,588		1,281		—		5,814
CGP ⁽²⁾	92		161		157		167		1,382		1,053		3,012
Total principal and interest	$	265	$	525	$	565	$	3,755	$	2,663	$	1,053	$	8,826

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⁽¹⁾	Debt principal payments are estimated amounts based on maturity dates and potential borrowings under our revolving credit facility. Interest payments are estimated based on the forward-looking LIBOR curve. Actual payments may differ from these estimates.


⁽²⁾	See Note 17 for additional information about CGP’s debt.

CERP Debt

On May 12, 2017, CERP amended its first lien credit agreement to reduce the interest rate margins applicable to approximately $211 million of its revolving credit facility and to the entire remaining $2.4 billion of its term loan facility by 2.50%. The amendment also included automatic step-ups in the scheduled quarterly payments to approximately $16 million beginning December 31, 2018, and to approximately $31 million beginning December 31, 2019. This amendment resulted in a loss on extinguishment of debt of approximately $1 million, which is recorded in Restructuring of CEOC and other in the Statements of Operations.



	June 30, 2017								December 31, 2016
(Dollars in millions)	Final Maturity	Rate(s) ⁽¹⁾	Face Value			Book Value			Book Value
CERP Credit Facility
CERP Revolving Credit Facility⁽²⁾	2018	various	$	—		$	—		$	40
CERP Senior Secured Term Loan ⁽³⁾	2020	4.73%	2,413			2,379			2,387
CERP Notes
CERP First Lien Notes	2020	8.00%	1,000			995			993
CERP Second Lien Notes	2021	11.00%	1,150			1,140			1,140
Capital lease obligations and other	2017	various	1			1			3
Total CERP Debt			4,564			4,515			4,563
Current portion of CERP long-term debt			(26		)	(26		)	(68		)
CERP long-term debt			$	4,538		$	4,489		$	4,495

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⁽¹⁾	Interest rate is fixed, except where noted.


⁽²⁾	Variable interest rate for the $211 million amended revolver is LIBOR plus 3.50%, down from 6.00% prior to the amendment. The variable interest rate on the remaining $59 million is determined by adding LIBOR to a base rate of 6.00%.


⁽³⁾	Variable interest rate was amended during the 2017 second quarter from 6.00% plus the greater of LIBOR or a 1% floor to 3.50% plus the greater of LIBOR or a 1% floor.

CGP Debt

On April 27, 2017, CGPH entered into an Incremental Assumption Agreement and Amendment No. 1 to its First Lien Credit Agreement that, among other things, (a) provided for an increase in CGPH’s existing Senior Secured Term Loan of $175 million to approximately $1.3 billion and (b) reduced the interest rate margins applicable to the Senior Secured Term Loan and CGPH's existing $150 million revolving credit facility by 2.25%. On June 20, 2017, the $175 million incremental proceeds were used to repay the property-specific term loan encumbering The Cromwell, which extended the final maturity for the majority of the $175 million from 2019 to 2021. At the time of the repayment, The Cromwell became part of the CGPH restricted group (which is subject to certain restrictions or limitations placed on CGPH and its restricted subsidiaries), and its assets were pledged as collateral for both the CGPH Senior Secured Term Loan and the CGPH Notes. This amendment resulted in a loss on extinguishment of debt of approximately $4 million, which is recorded in Restructuring of CEOC and other in the Statements of Operations.



	June 30, 2017								December 31, 2016
(Dollars in millions)	Final Maturity	Rate(s) ⁽¹⁾	Face Value			Book Value			Book Value
CGPH Credit Facilities
CGPH Senior Secured Revolving Credit Facility ⁽²⁾	2019	various	$	—		$	—		$	—
CGPH Senior Secured Term Loan ⁽³⁾	2021	4.23%	1,314			1,291			1,119
CGPH Notes	2022	9.38%	675			663			662
Cromwell Credit Facility	N/A	N/A	—			—			167
Horseshoe Baltimore Credit and FF&E Facilities⁽⁴⁾
Horseshoe Baltimore Revolving Facility Loan ⁽⁵⁾	2018	various	—			—			—
Horseshoe Baltimore Credit Facility ⁽⁶⁾	2020	8.30%	296			287			287
Horseshoe Baltimore FF&E Facility⁽⁷⁾⁽⁸⁾	2019	8.75%	19			19			22
Other secured debt	2018	8.00%	5			4			4
Special Improvement District Bonds	2037	5.30%	13			13			14
Total CGP Debt			2,322			2,277			2,275
Current portion of CGP long-term debt			(22		)	(22		)	(21		)
CGP long-term debt			$	2,300		$	2,255		$	2,254

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⁽¹⁾	Interest rate is fixed, except where noted.


⁽²⁾	Variable interest rate calculated as LIBOR plus 3.00%, down from 5.25% prior to the amendment.


⁽³⁾	Variable interest rate was amended during the 2017 second quarter from 5.25% plus the greater of LIBOR or a 1% floor to 3.00% plus the greater of LIBOR or a 1% floor.


⁽⁴⁾	See Note 17.


⁽⁵⁾	Variable interest rate calculated as LIBOR plus 7.00%.


⁽⁶⁾	Variable interest rate calculated as 7.00% plus the greater of LIBOR or a 1.25% floor.


⁽⁷⁾	Variable interest rate calculated as 7.50% plus the greater of LIBOR or a 1.25% floor. The rate is set at the 1.25% floor as of June 30, 2017.


⁽⁸⁾	This represents an equipment financing term loan facility.

Terms of Outstanding Debt

Restrictive Covenants

The CERP Notes, CERP Credit Facility, CGPH Senior Secured Term Loan, CGPH Notes, and Horseshoe Baltimore Credit and FF&E Facilities all include negative covenants, subject to certain exceptions, and contain affirmative covenants and events of default, subject to exceptions, baskets and thresholds (including equity cure provisions in the case of the CERP Credit Facility, and Horseshoe Baltimore Credit and FF&E Facilities), all of the preceding being customary in nature.

The restrictive covenants also require that we maintain Senior Secured Leverage Ratios (“SSLR”) as shown in the table below. SSLR is defined as the ratio of first lien senior secured net debt to earnings before interest, taxes, depreciation and amortization, adjusted as defined (“Adjusted EBITDA”).



Credit Facility	Covenant Type	Effective Period	Requirement
CERP Credit Facility	CERP Maximum SSLR	From inception	8.00	to 1.00
CGPH Senior Secured Term Loan	CGPH Maximum SSLR	From inception	6.00	to 1.00
Horseshoe Baltimore Credit and FF&E Facilities ⁽¹⁾	CBAC Maximum SSLR	Q1 - Q4 2017	6.00	to 1.00
Horseshoe Baltimore Credit and FF&E Facilities ⁽¹⁾	CBAC Maximum SSLR	Q1 2018 and thereafter	4.75	to 1.00

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⁽¹⁾	See Note 17.

Guarantees

CERP has pledged a significant portion of its assets as collateral under the notes and facilities. The CERP Notes are co-issued, as well as fully and unconditionally guaranteed, jointly and severally, by Caesars Entertainment Resort Properties, LLC (parent entity) and each of its wholly-owned subsidiaries on a senior secured basis.

The CGPH Senior Secured Term Loan is guaranteed by the direct parent of CGPH and substantially all of CGPH’s subsidiaries, and is secured by the direct parent’s equity interest in CGPH and substantially all of the existing and future assets of CGPH and the subsidiary guarantors.

The CGPH Notes are secured by substantially all of the existing and future property and assets of CGPH and the subsidiary guarantors (subject to exceptions), and are guaranteed by CGPH and substantially all of CGPH’s subsidiaries (subject to exceptions).

The Horseshoe Baltimore Credit Facility is secured by substantially all material assets of CBAC and its wholly-owned domestic subsidiaries.

The Horseshoe Baltimore FF&E Facility is secured by the FF&E that was purchased with the proceeds.