The leading hospitality and gaming company, Caesars Entertainment, announced a major financial move Wednesday. The company confirmed in a statement that it plans to sell some $1.5 billion in bonds. The bonds would be available for qualified institutional buyers in a private placement in line with Rule 144A of the Securities Act of 1933. The aforementioned amount of bonds, described by the company as senior secured notes, are due in 2032. According to Caesars, the notes will be guaranteed by its domestic subsidiaries, subject to the relevant regulatory approvals.

“Caesars Entertainment, Inc. today announced that the Company, intends to offer, subject to market and other conditions, $1,500.0 million aggregate principal amount of senior secured notes due 2032 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to persons outside the United States under Regulation S of the Securities Act,“

reads a statement released by Caesars Entertainment

Besides offering $1.5 billion in bonds, the company confirmed plans to secure a new $2 billion senior secured term loan facility described as the “New Term B-1 Loan.” This would be achieved through an amendment to the existing CEI Credit Agreement. Still, Caesars explained that the closing of “the New Term B-1 Loan under the CEI Credit Agreement is not a condition to the closing of the sale of the Notes.”

The gaming and entertainment company revealed that the proceeds from the term loan and notes would be used to address current debt obligations, and this includes the company’s 6.250% Senior Secured Notes due 2025. Additionally, the loan and note proceeds would also satisfy expenses and fees related to the aforementioned transactions.

Preliminary Q4 2023 Results Deviate from Projections

The announced strategic financial move follows the release of Caesars’ preliminary Q4 results. Earlier this month, the company uncovered details regarding its expected performance for the fourth quarter of 2023, highlighting that the EBITDA and sales projections of analysts may deviate from the actual results.

Caesars estimated that its revenue for Q4 2023 is expected to be between $2.815 billion and $2.835 billion, just shy of the Wall Street prediction of $2.89 billion. EBITDA for the period is expected to be in the range of $920 million and $940 million, under the projections of analysts for $957 million.

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Earlier this month, Lottomatica, an Italian gaming giant, announced its plans to acquire 100% of SKS365’s share capital. The deal, which values the latter business at €639 million ($702 million) was signed recently and, if cleared by all relevant regulators, is set to close in the first half of 2024.

As a result of this major move, Lottomatia announced its plans to issue €500 million (approximately $549.1 million) in debt notes to fund the agreement. A first row of floating rate senior secured notes will be issued, followed by a second tranche of fixed rate senior secured notes. The latter notes will have a fixed rate of 7.125%. The move is also part of a €565 million 7.125% Senior Secured Notes due 2028 bond.

The division between the two bonds is yet to be announced and will likely be communicated once Lottomatica closes the deal or around the date of the completion.

In addition to that, Lottomatica has secured revolving credit cash borrowing of €50 million (roughly $55 million), under an existing revolving credit agreement.

The money Lottomatica secures through the notes and borrowings will allow it to fully fund the SKS365 purchase deal and cover all applicable fees and costs.

Lottomatica Is Looking Forward to Closing the Deal

Lottomatica will acquire SKS365 through its wholly-owned subsidiary CBO Spa. The successful deal comes in the wake of a failed takeover attempt by Playtech, which gave up on acquiring SKS365 recently. At the time, Flutter Entertainment was also rumored to be eyeing a takeover of SKS365’s business.

Guglielmo Angelozzi, Lottomatica’s chief executive officer, believes that the acquisition of SKS365 will provide CBO and Lottomatica with a major boost in Italy. As a company with over 1,000 shops and a significant online presence, SKS365 is an undeniably popular brand among local customers.

Angelozzi praised SKS365 as a top performer and lauded the efforts of its management team, which turned it into a local powerhouse.

Alexander Martin, SKS365’s CEO, also commented on the matter earlier, saying that his team is glad to join the Lottomatica family and believes that it could not have found a better acquisition partner.

For reference, SKS365 operates brands such as PlanetWin365 and PlanetPay365 in addition to running retail operations. Furthermore, the company has been decorated as one of Italy’s top employers for 2023.

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