Inside Gaming: Caesars Bond Hits High; SEC Penalizes IGT; Ohio Casino Challenge Dismissed

In this week’s installment of Inside Gaming, some good news for Caesars Entertainment Corp. (finally) during its ongoing battles with creditors regarding the bankruptcy filing of its largest operating division, IGT agrees to pay a hefty penalty imposed by the SEC, and a court ruling in Ohio halts a challenge to the constitutionality of the state’s casinos.

Caesars Bond Hits Three-Year High Amid Bankruptcy Battles

For the first time in a long while, there was positive news amid Caesars Entertainment Corp.’s ongoing efforts to manage the Chapter 11 bankruptcy filing of its largest operating division, Caesars Entertainment Operating Company, and resulting lawsuits from numerous creditors.

Earlier this week Bloomberg Markets reported that a Caesars bond “rose to the highest level in three years,” a result of “significant progress” having been made by the company “toward an agreement that would lift its operating unit out of bankruptcy.”

According to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, Caesars’ $760.4 million worth of 10 percent second-lien notes maturing 2018 increased to the point of trading 62.25 cents on the dollar, the highest level for the notes since April 2013.

In statement issued Monday, Caesars “said discussions are continuing with major creditors and the company is optimistic about reaching an agreement” that would enable them to end their court battles.

In the spring of 2014, the parent company restructured by separating into three separate divisions, a move then characterized as part of an effort to avoid declaring bankruptcy while managing its industry-leading $18 billion-plus debt.

The largest and most debt-ridden of the three new divisions — Caesars Entertainment Operating Co. — includes more than 40 properties such as Caesars Palace, Caesars Atlantic City, and others. (The other two divisions are Caesars Entertainment Resorts Properties and Caesars Growth Properties.)

But in January 2015 came the Chapter 11 bankruptcy filing for that largest division, the CEOC, and subsequently several creditors filed lawsuits claiming the earlier restructuring had been unfairly designed to avoid paying debts they were owed.

In March 2015 Caesars received a scolding from the Nevada Gaming Commission with the NGC chairman characterizing the bankruptcy case as “an embarrassment to Caesars and the state of Nevada.” Then in June 2015 efforts by Caesars to stop the lawsuits while details of …

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