Harrah’s Entertainment, the privately owned casino operator that has been linked to gaming projects in Taiwan and the Philippines, is another US gaming business facing bankruptcy risk, according to an American bond analyst.
Barbara Cappaert, of KDP Investment Advisors, was quoted by Las Vegas Gaming Wire saying she doubted a new debt swap offer by Harrah’s would be a success.
“We think this latest restructuring is an attempt to rearrange the deck chairs on the Titanic,” stated Ms Cappaert.
“The company will very likely throw in the towel and reduce debt via a debt/equity restructuring (or bankruptcy) later this year to streamline its balance sheet,” she added.
Last week Harrah’s said it wanted to swap an unspecified amount of debt for USD2.8 billion in lower value/higher interest notes that would mature in nine years.
Harrah’s owners, private equity firms Apollo Management and TPG Capital, are offering to exchange the notes issued in December for USD250 million, or 37 cents on the dollar, for notes tendered and accepted by 17th April. A price of 34 cents on the dollar would be accepted for notes tendered past that date, added Ms Cappaert.
The offer expires midnight EST on 1st April. A three cents on the dollar premium in new notes will be paid to investors who accept the offer before 5pm EST on 18th March said the analyst.
Harrah’s declined to comment on the bankruptcy risk claims.
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