Folks, the Bubble has burst! It's over!
The inflated revenues and phony job figures will prevent even the capital markets from investing in SLOT BARNS, even in virgin territory.
Fini!
Caesars selling properties to raise $500 million
By JOSH KOSMAN
February 9, 2012
Caesars Entertainment shares soared 71 percent in their debut yesterday — but quietly, behind the glitz, America’s largest casino chain is selling some properties to raise $500 million, The Post has learned.
Caesars is auctioning its Midwest River casinos and will use the cash to invest in new projects — like a Massachusetts casino, two sources close to the situation said.
Non-binding bids are being accepted this week, the sources said.
A Caesars lender, unaware of the sale until alerted by a reporter, said,“I would find that to be a big, big departure from their stated plans.”
Indeed, money-losing Caesars said in its marketing effort that one of the casino’s advantages is that customers can use reward points at any of its 52 casinos.
The 10 properties that Caesars, formerly known as Harrah’s, is considering selling include Harrah’s in Illinois, Indiana, Iowa, Louisiana and Mississippi.
Caesars is not the only large casino struggling to finance expansion plans.
The Mohegan Tribal Gaming Authority is trying to refinance debt by using its Mohegan Sun casino, the country’s second-biggest casino, as collateral — even though it sits on tribal land, according to Covenant Review, a bond research provider.
Such an undertaking would mark the first time an Indian tribe operating a casino on tribal land made such a move. It is unclear if Washington would allow it.
If the MTGA does not succeed in getting lenders holding 90 percent of $250 million in debt to swap for new notes with a later maturity, with the casino as collateral, it could default as soon as next month.
That would make it hard for the MTGA to raise the cash needed to complete expansion plans — including bidding on a new Massachusetts casino.
Caesars is not facing immediate collapse, but its debt problems are no less severe than what the MTGA faces.
Today, Caesars is expected to complete a $1.25 billion bond offering. It will use $1 billion of the proceeds to pay down $5 billion in loans due 2015.
With the $1 billion payment, the lenders will agree to extend the maturity on $2.5 billion of the remaining debt to 2018 — while jacking up the interest rate by 2.25 percentage points.
The higher interest payments will cost Caesars $100 million a year.
Overall, Caesars owes $19.6 billion.
Fortunately, Caesars has about $2 billion of liquidity, and no significant debt payments until 2015.
Caesars, even though it only sold 16.3 million shares in the IPO, now has the ability to trade debt for equity and reduce its loans, perhaps in the next six months, sources said.
Private-equity firms Apollo Management and TPG Capital bought Caesars in a $28 billion leveraged buyout in 2008.
Casinos jacked up their borrowings during the credit boom in the belief that Las Vegas, which had never had a down year, never would. But the recession caused gaming revenues to fall in 2008 and 2009.
A Caesars spokesman declined to comment. Mohegan Sun and government officials did not return calls.
Read more: http://www.nypost.com/p/news/business/rolling_the_dice_h9p5omq8lR3tnpJ3ortUsN#ixzz1pJ4Hbffy
Showing posts with label Apollo. Show all posts
Showing posts with label Apollo. Show all posts
Friday, March 16, 2012
Tuesday, December 21, 2010
Twin River stake purchased
Twin River stake purchased
A subsidiary of the New York private-equity company that owns the Harrah’s casino firm has notified Rhode Island it has purchased a share of the Twin River slot parlor in Lincoln.
Louis A. DeQuattro, a deputy director and legal counsel for the state Department of Business Regulation, confirmed this morning that an arm of Apollo Global Management — Apollo Twin River Holdings LP — notified the agency Dec. 7 that it proposes to acquire more than a 5-percent stake in Twin River, the minimum required to be listed as an owner of record.
Apollo Global Management specializes in searching out distressed businesses it can buy cheaply, straighten out quickly and sell profitably.
In 2008, it bought Harrah’s Entertainment Inc., the Nevada casino operator that tried unsuccessfully to open a casino in West Warwick.
Apollo cannot acquire more than 5 percent of Twin River unless it receives approval from DBR, DeQuattro said.
Known for its hardball tactics and its expertise on snapping up struggling businesses, Apollo sought a wedge into the convoluted finances of the Twin River slot parlor earlier this year.
A proposal surfaced in the waning days of the last General Assembly session to require the DBR to accept bids for licensing from any entity that has a financial interest of 5 percent or more in Twin River. Rep. Donald Lally, D-Narragansett, introduced the bill at the request of Apollo Global Management.
At the time, the holding company that operates Twin River — UTGR Inc. — remained under federal bankruptcy protection. UTGR emerged from bankruptcy in November, when the state Division of Lotteries approved transferring the licenses needed to operate the Lincoln gambling hall to UTGR’s new owners.
A lenders group, led by two national banks and a Massachusetts investment firm, spent two years working to recoup millions of dollars it lent to the slot parlor’s previous owner, BLB Investors LLC.
The group wrote off $290 million in loans and pushed out BLB as it took ownership of Twin River. The lenders are led by Bank of America/Merrill Lynch, Wells Fargo /Wachovia and Sankaty Advisors, each of which owns at least 5 percent of the slot parlor as a result of the bankruptcy case. A number of other investment funds and banks own lesser shares of the slot parlor.
It’s unclear when Apollo took a share of the Twin River business, how it came to own its share or how much of the business it seeks to own.
DeQuattro refused to disclose which documents the agency received in support of Apollo’s request or when the agency received them, other than a Dec. 7 letter from the financial firm’s Rhode Island lawyer, Edward D. Pare Jr. at Brown Rudnick.
DeQuattro said DBR officials will review Apollo’s request but said it’s unknown whether agency officials will hold a public hearing on the matter.
Apollo Global Management, through a spokesman, declined comment.
A subsidiary of the New York private-equity company that owns the Harrah’s casino firm has notified Rhode Island it has purchased a share of the Twin River slot parlor in Lincoln.
Louis A. DeQuattro, a deputy director and legal counsel for the state Department of Business Regulation, confirmed this morning that an arm of Apollo Global Management — Apollo Twin River Holdings LP — notified the agency Dec. 7 that it proposes to acquire more than a 5-percent stake in Twin River, the minimum required to be listed as an owner of record.
Apollo Global Management specializes in searching out distressed businesses it can buy cheaply, straighten out quickly and sell profitably.
In 2008, it bought Harrah’s Entertainment Inc., the Nevada casino operator that tried unsuccessfully to open a casino in West Warwick.
Apollo cannot acquire more than 5 percent of Twin River unless it receives approval from DBR, DeQuattro said.
Known for its hardball tactics and its expertise on snapping up struggling businesses, Apollo sought a wedge into the convoluted finances of the Twin River slot parlor earlier this year.
A proposal surfaced in the waning days of the last General Assembly session to require the DBR to accept bids for licensing from any entity that has a financial interest of 5 percent or more in Twin River. Rep. Donald Lally, D-Narragansett, introduced the bill at the request of Apollo Global Management.
At the time, the holding company that operates Twin River — UTGR Inc. — remained under federal bankruptcy protection. UTGR emerged from bankruptcy in November, when the state Division of Lotteries approved transferring the licenses needed to operate the Lincoln gambling hall to UTGR’s new owners.
A lenders group, led by two national banks and a Massachusetts investment firm, spent two years working to recoup millions of dollars it lent to the slot parlor’s previous owner, BLB Investors LLC.
The group wrote off $290 million in loans and pushed out BLB as it took ownership of Twin River. The lenders are led by Bank of America/Merrill Lynch, Wells Fargo /Wachovia and Sankaty Advisors, each of which owns at least 5 percent of the slot parlor as a result of the bankruptcy case. A number of other investment funds and banks own lesser shares of the slot parlor.
It’s unclear when Apollo took a share of the Twin River business, how it came to own its share or how much of the business it seeks to own.
DeQuattro refused to disclose which documents the agency received in support of Apollo’s request or when the agency received them, other than a Dec. 7 letter from the financial firm’s Rhode Island lawyer, Edward D. Pare Jr. at Brown Rudnick.
DeQuattro said DBR officials will review Apollo’s request but said it’s unknown whether agency officials will hold a public hearing on the matter.
Apollo Global Management, through a spokesman, declined comment.
Saturday, November 21, 2009
Foxwoods debt may pay for billionaire
Cape Cod Times reports --
LEDYARD, Conn — A billionaire's reported move to buy up some of the Mashantucket Pequot Tribal Nation's debt just might be a good opportunity — for the investor, a ratings analyst said this week.
Leon Black, who heads up Apollo Management L.P. of New York City, has been buying up the tribe's debt, the New York Post said Tuesday. Both the tribe and a spokeswoman for Apollo declined comment on the report.
The tribe owns Foxwoods Resort Casino and MGM Grand at Foxwoods on Mashantucket tribal land in Ledyard.
At Standard & Poor's, Managing Director Craig Parmalee said Black's reported investment is unusual, because it doesn't come with the same expectations associated with a traditional potential bankruptcy. That's because the tribe is a sovereign nation, and cannot be displaced from running the casinos. However, the maneuver could yield rewards for Black, he said.
"Often, when an investor purchases debt of a company who has defaulted, it's some effort to have a controlling position in a bankruptcy," Parmalee said. "In the case of a tribal situation, that is not possible, because you have to be the tribe to operate Foxwoods casino. So, my guess is (Black) may just look at this at a good investment.
"And it might create an opportunity for him to generate a return on his investment."
The implications of Black's reported actions for the tribe or the casinos are not clear.
According to the Post, Apollo bought Harrah's, a commercial casino, last year along with two other private-equity firms.
On Tuesday, the tribe said it expects to default by Dec. 16 on the balance of a $21.25 million bond interest payment that had been due Monday. While the tribe emphasized the continued efforts to restructure more than $2 billion in debt won't affect the casinos, it has not said whether tribal government or payments to tribal members could be affected.
And according to one financial source, a default on 8.5 percent notes would not necessarily cause the tribe difficulty.
LEDYARD, Conn — A billionaire's reported move to buy up some of the Mashantucket Pequot Tribal Nation's debt just might be a good opportunity — for the investor, a ratings analyst said this week.
Leon Black, who heads up Apollo Management L.P. of New York City, has been buying up the tribe's debt, the New York Post said Tuesday. Both the tribe and a spokeswoman for Apollo declined comment on the report.
The tribe owns Foxwoods Resort Casino and MGM Grand at Foxwoods on Mashantucket tribal land in Ledyard.
At Standard & Poor's, Managing Director Craig Parmalee said Black's reported investment is unusual, because it doesn't come with the same expectations associated with a traditional potential bankruptcy. That's because the tribe is a sovereign nation, and cannot be displaced from running the casinos. However, the maneuver could yield rewards for Black, he said.
"Often, when an investor purchases debt of a company who has defaulted, it's some effort to have a controlling position in a bankruptcy," Parmalee said. "In the case of a tribal situation, that is not possible, because you have to be the tribe to operate Foxwoods casino. So, my guess is (Black) may just look at this at a good investment.
"And it might create an opportunity for him to generate a return on his investment."
The implications of Black's reported actions for the tribe or the casinos are not clear.
According to the Post, Apollo bought Harrah's, a commercial casino, last year along with two other private-equity firms.
On Tuesday, the tribe said it expects to default by Dec. 16 on the balance of a $21.25 million bond interest payment that had been due Monday. While the tribe emphasized the continued efforts to restructure more than $2 billion in debt won't affect the casinos, it has not said whether tribal government or payments to tribal members could be affected.
And according to one financial source, a default on 8.5 percent notes would not necessarily cause the tribe difficulty.
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