Caesars Entertainment Operating Company filed with the U.S. Bankruptcy Court a motion authorizing the Debtors to make a cash distribution to bank claimholders in order to pay down $300 million in principal amounts outstanding under the Company’s pre-petition credit agreement.
The motion explains, “The Amended Bank RSA is a comprehensive compromise between the Debtors, CEC, and the First Lien Bank Lenders. For their part, among other things, the Debtors agreed to use good-faith efforts to seek authority to repay, in cash, $300 million of the principal amount outstanding under the Prepetition Credit Agreement, amounts the Debtors otherwise would be required to re-pay at some point, whether pursuant to a chapter 11 plan, in a chapter 7 liquidation, or otherwise. The Debtors believe that the proposed payment of less than 6 % of the principal amount outstanding under their prepetition credit facility is reasonable in light of the continued delay in a plan distribution to the First Lien Bank Lenders on account of their senior secured claims as well as in light of the expected future risks associated with the potential for further litigation at the plan confirmation stage.”
The motion continues, “Situated at the top of the Debtors’ capital structure, the First Lien Bank Lenders hold claims under four term loans issued pursuant to the Debtors’ Prepetition Credit Agreement, which claims totalled approximately $5.35 billion as of the Petition Date, which amount has continued to, and will continue to, accrue (collectively, the ‘Bank Claims’)….In addition, this payment would also reduce the postpetition interest owed on account of the $300 million of Bank Claims being repaid (under the current Plan, the Bank Guaranty Settlement would be reduced by an estimated $20.7 million, assuming the pay down occurs on or around August 20, 2016, and an Effective Date of June 30, 2017). The interest savings could be greater if it is determined that the First Lien Bank Lenders are entitled to a higher interest rate under a different chapter 11 plan.”
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Resource: https://www.kvtr.com/entertainment/
The motion explains, “The Amended Bank RSA is a comprehensive compromise between the Debtors, CEC, and the First Lien Bank Lenders. For their part, among other things, the Debtors agreed to use good-faith efforts to seek authority to repay, in cash, $300 million of the principal amount outstanding under the Prepetition Credit Agreement, amounts the Debtors otherwise would be required to re-pay at some point, whether pursuant to a chapter 11 plan, in a chapter 7 liquidation, or otherwise. The Debtors believe that the proposed payment of less than 6 % of the principal amount outstanding under their prepetition credit facility is reasonable in light of the continued delay in a plan distribution to the First Lien Bank Lenders on account of their senior secured claims as well as in light of the expected future risks associated with the potential for further litigation at the plan confirmation stage.”
The motion continues, “Situated at the top of the Debtors’ capital structure, the First Lien Bank Lenders hold claims under four term loans issued pursuant to the Debtors’ Prepetition Credit Agreement, which claims totalled approximately $5.35 billion as of the Petition Date, which amount has continued to, and will continue to, accrue (collectively, the ‘Bank Claims’)….In addition, this payment would also reduce the postpetition interest owed on account of the $300 million of Bank Claims being repaid (under the current Plan, the Bank Guaranty Settlement would be reduced by an estimated $20.7 million, assuming the pay down occurs on or around August 20, 2016, and an Effective Date of June 30, 2017). The interest savings could be greater if it is determined that the First Lien Bank Lenders are entitled to a higher interest rate under a different chapter 11 plan.”
Resource: http://bankruptcompanynews.com
Resource: https://www.kvtr.com/entertainment/
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