Debt

9 Months Ended

Sep. 30, 2019



	September 30, 2019								December 31, 2018
(Dollars in millions)	Final Maturity	Rates	Face Value			Book Value			Book Value
Secured debt
CRC Revolving Credit Facility	2022	variable ⁽¹⁾	$	—		$	—		$	100
CRC Term Loan	2024	variable ⁽²⁾	4,618			4,550			4,577
CEOC LLC Revolving Credit Facility	2022	variable ⁽³⁾	—			—			—
CEOC LLC Term Loan	2024	variable ⁽³⁾	1,224			1,222			1,483
Unsecured debt
CEC Convertible Notes	2024	5.00%	1,083			1,083			1,083
CRC Notes	2025	5.25%	1,700			1,670			1,668
Special Improvement District Bonds	2037	4.30%	53			53			54
Total debt			8,678			8,578			8,965
Current portion of long-term debt			(64		)	(64		)	(164		)
Long-term debt			$	8,614		$	8,514		$	8,801

Unamortized discounts and deferred finance charges						$	100		$	110
Fair value			$	8,699

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⁽¹⁾	London Interbank Offered Rate (“LIBOR”) plus 2.13%.


⁽²⁾	LIBOR plus 2.75%.


⁽³⁾	LIBOR plus 2.00%.

Annual Estimated Debt Service Requirements as of September 30, 2019

	Remaining		Years Ended December 31,
(In millions)	2019		2020		2021		2022		2023		Thereafter		Total
Annual maturities of long-term debt	$	16	$	64	$	64	$	64	$	64	$	8,406	$	8,678
Estimated interest payments	160		440		420		390		370		460		2,240
Total debt service obligation ⁽¹⁾	$	176	$	504	$	484	$	454	$	434	$	8,866	$	10,918

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⁽¹⁾	Debt principal payments are estimated amounts based on maturity dates and borrowings under our revolving credit facilities, if any. Interest payments are estimated based on the forward-looking LIBOR curve and include the estimated impact of the ten interest rate swap agreements (see Note 6). Actual payments may differ from these estimates.

Current Portion of Long-Term Debt

The current portion of long-term debt as of September 30, 2019 and December 31, 2018 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are expected to be paid within 12 months.

Borrowings under the revolving credit facilities are each subject to the provisions of the applicable credit facility agreements, which each have a contractual maturity of greater than one year. Amounts borrowed, if any, under the revolving credit facilities are intended to satisfy short-term liquidity needs and would be classified as current. As of September 30, 2019, $50 million of our revolving credit facilities were committed to outstanding letters of credit.

Fair Value

The fair value of debt has been calculated primarily based on the borrowing rates available as of September 30, 2019 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.

Terms of Outstanding Debt

The Company may elect, at its option, to prepay any borrowings outstanding under the CEOC LLC Credit Agreement without premium or penalty (except with respect to any break funding payments which may be payable pursuant to the terms of the CEOC LLC Credit Agreement). On September 13, 2019, we made a voluntary payment of $250 million toward the outstanding principal balance of our CEOC LLC Term Loan.

Restrictive Covenants

The CRC Credit Agreement, CEOC LLC Credit Agreement, as amended, and the indentures related to the CRC Notes contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit the ability of CRC and certain of its subsidiaries, and CEOC LLC and certain of its subsidiaries, respectively, to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions. The indenture related to the CEC Convertible Notes contains covenants including negative covenants, which, subject to certain exceptions, limit the Company’s ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets, and make acquisitions.

The CRC Revolving Credit Facility and CEOC LLC Revolving Credit Facility include maximum first-priority net senior secured leverage ratio financial covenants of 6.35:1 and 3.50:1, respectively, which are applicable solely to the extent that certain testing conditions are satisfied.

Guarantees

The borrowings under the CRC Credit Agreement and CEOC LLC Credit Agreement, as amended, are guaranteed by the material, domestic, wholly owned subsidiaries of CRC and CEOC LLC, respectively, (subject to exceptions) and substantially all of the applicable existing and future property and assets of CRC or CEOC LLC, respectively, and their respective subsidiary guarantors serve as collateral for the respective borrowings.

The CRC Notes are guaranteed on a senior unsecured basis by each wholly owned, domestic subsidiary of CRC that is a subsidiary guarantor with respect to the CRC Senior Secured Credit Facilities.