The bonds investors exchanged had maturities ranging from 2010 to 2018. They were exchanged for $2.8 billion in principal of 10-percent second-priority senior secured notes due 2018. Investors have until early April to tender additional bonds.
Harrah's also said a group of investors including Apollo Global Management and TPG Capital, which took the company private in January 2008 for $30 billion, raised its cash tender offer to $350 million from $250 million for 10-percent second-priority senior secured notes due 2015 and due 2018.
Industry sources have speculated that the tender offer is meant to keep the current owners in control of the company should it have to file for bankruptcy. Harrah's has about $24.5 billion face value of outstanding debt, according to a regulatory filing. The company warned earlier this week it may not be able to meet its debt payments due to the impact of the recession on its business operations, a situation that would likely result in a Ch. 11 bankruptcy filing.
Harrah's operates 53 casinos including Caesars Palace, Flamingo, Bally's, Paris and the Rio, all on the Las Vegas Strip. Last week, it reported a 6.5% year-over-year drop in revenue to $10.1 billion, resulting in a loss of $4.3 billion, which compares to a profit of $1.7 billion in 2007.
Last month, Harrah's submitted requests to tap the remaining $740 million of its $2 billion senior secured revolving credit line and suspended matching contributions to employee retirement programs. In January, it delayed the completion and opening of its 660-room addition to Caesars Palace indefinitely.
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