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Subsequent Events
12 Months Ended
Dec. 31, 2011
Subsequent Events [Abstract]  
Subsequent Events

Note 22—Subsequent Events

Interest Rate Swap Agreements

On January 18, 2012, the Company amended the terms of three $1.0 billion notional value of interest rate swap contracts with a corresponding change in the elected interest rate on $3.0 billion of term loans under the Credit Facilities. Effective January 25, 2012 through January 25, 2014, the variable rate received on the swaps changed from 3-month to 1-month LIBOR and the fixed payment rate was reduced by 16.5 basis points.

Chester Bond Offering

On February 3, 2012, Chester Downs issued $330.0 million aggregate principal amount of 9.25% senior secured notes due 2020 through a private placement. Chester Downs used $232.4 million of the proceeds of the notes to repay its existing term loan plus accrued interest and a prepayment penalty. The remaining proceeds were used to make a distribution to Chester Downs' managing member, Harrah's Chester Downs Investment Company, LLC, a wholly-owned subsidiary of CEOC, and for other general corporate purposes.

Chester Put/Call

On January 20, 2012, we received notice that the minority owners of Chester Downs have elected to exercise their put rights under an operating agreement with one of its wholly-owned subsidiaries. As a result, effective as of January 22, 2012, we were required to purchase from the minority owners 90% of their interest in Chester Downs for consideration of approximately $9.6 million. We consummated this purchase on February 14, 2012. As a result, we now have a 99.5% ownership interest in this property.

Caesars Public Offering and Stock Split

On February 8, 2012, CEC offered 1.8 million shares of its common stock in a public offering (the "Public Offering"), at $9.00 per share. The Company received net proceeds of approximately $15.2 million on February 13, 2012, after taking into account expenses and underwriting commissions and giving effect to the exercise of the underwriters' overallotment option. Under this option, the Company granted to the underwriters, and the underwriters subsequently exercised, a 30-day option to purchase 271,697 additional shares of its common stock at the initial price less underwriting discounts and commissions. CEC used the net proceeds from the Public Offering for general corporate purposes. None of the Sponsors or affiliates or employees of the Company participated in the Public Offering as selling stockholders.

 

CEC has listed its common stock on the NASDAQ Global Select Market under the symbol "CZR."

In connection with the Public Offering, the Company effected a 1.742-for-one split of its common stock.

Co-Investors Transaction

The Company entered into a Release and Contribution Agreement, dated as of January 25, 2012 (the "Contribution Agreement"), with certain of its direct and indirect stockholders, pursuant to which the Company, Hamlet Holdings and entities controlled by the Sponsors have agreed to release the contractual transfer restrictions on the shares of our common stock (the "Released Shares") beneficially owned by certain indirect stockholders (the "Participating Co-Investors"). The Released Shares comprise 24.2 million shares of the Company's common stock. In consideration for such release, the Participating Co-Investors have agreed to direct the contribution to the Company of 1.8 million Released Shares beneficially owned by each Participating Co-Investor (the "Delivered Shares"). CEC agreed to cause the registration for resale (the "Shelf Registration") under the Securities Act of the remaining Released Shares not constituting Delivered Shares (the "Registered Shares") and the listing of the Registered Shares on NASDAQ. Upon the effectiveness of the Shelf Registration filed in connection with the Public Offering, 50% of the Registered Shares became eligible for resale under the Shelf Registration. In connection with the Public Offering, the Participating Co-Investors agreed not to offer or sell, dispose of or hedge, directly or indirectly, the remaining 50% of the Registered Shares without the permission of certain of the underwriters for the Public Offering for a period of 180 days from the pricing of the Public Offering, subject to certain exceptions and automatic extension in certain circumstances. The shares of common stock offered by the Company in the Public Offering, excluding any shares issued pursuant to the underwriters' option to purchase additional shares, was equal in number to the Delivered Shares contributed to CEC on behalf of the Participating Co-Investors.

CEOC Bond Offering

In February 2012, Caesars Operating Escrow LLC and Caesars Escrow Corporation, wholly owned subsidiaries of CEOC, completed the offering of $1,250.0 million aggregate principal amount of 8.5% senior secured notes due 2020, the proceeds of which were placed into escrow. On March 1, 2012, the escrow conditions were satisfied and CEOC assumed the notes. CEOC used $1,095.6 million of the net proceeds from this transaction to repay a portion of its credit facilities in connection with the amendment discussed below.

Amendment to CEOC Credit Facilities

On March 1, 2012, CEOC entered into an amendment to its outstanding senior secured credit agreement, to, among other things, (i) extend the maturity of B-1, B-2 and B-3 term loans held by consenting lenders from January 28, 2015 to January 28, 2018 and increase the interest rate with respect to such extended term loans (the "Term B-6 Loans"); (ii) convert original maturity revolver commitments held by consenting lenders to Term B-6 Loans and promptly following such conversion, repay Term B-6 Loans held by any consenting lender in an amount equal to 10% of the amount of revolver commitments that such lender elected to convert; (iii) extend the maturity of original maturity revolver commitments held by consenting lenders who elect not to convert their commitments to term loans, from January 28, 2014 to January 28, 2017 and increase the interest rate and the undrawn commitment fee with respect to such extended revolver commitments and upon the effectiveness of such extension, terminate 20% of extended revolver commitments on a pro rata basis; and (iv) modify certain other provisions of the credit facilities. In addition to the foregoing, the CEOC may elect to extend and/or convert additional term loans and/or revolver commitments from time to time.

After giving effect to the credit agreement amendment, there are $2,113.1 million of existing B-1, B-2 and B-3 term loans outstanding with a maturity of January 28, 2015, $1,862.9 million of extended Term B-6 Loans outstanding with a maturity of January 28, 2018, $25.0 million of extended revolver commitments with a maturity of January 28, 2017 and $1,104.5 million of existing revolving commitments outstanding with a maturity of January 28, 2014. The Term B-6 Loans will have a springing maturity to April 14, 2017 if more than $250.0 million of the Company's 11.25% Senior Secured Notes due 2017 remain outstanding on April 14, 2017. As part of the amendment, CEOC's existing tranche of $1,222.7 million of B-5 term loans maturing on January 28, 2018 was also modified to provide for the same springing maturity that applies to the Term B-6 Loans.