Item 1.01 Entry into Material Definitive Agreement.
On May 12, 2017, Caesars Entertainment Resort Properties, LLC (“
CERP
”), a subsidiary of Caesars Entertainment Corporation
(“
CEC
”), entered into an Amendment No. 1 (the “
Amendment”
), by and among CERP, Caesars Entertainment Resort Properties Finance, Inc. (“
CERP Finance
”), the other loan parties party thereto, the
lenders party thereto and Citicorp North America, Inc., as Administrative Agent (the “
Administrative Agent
”). The Amendment amends the First Lien Credit Agreement, dated as of October 11, 2013, among CERP, CERP Finance, the
other loan parties party thereto, the lenders party thereto and the Administrative Agent (the “
First Lien Credit Agreement
”).
Among
other things, the Amendment (a) reduces the interest rate margins applicable to approximately $211 million of CERP’s existing $270 million revolving credit facility (the “
Revolving Facility
”) to, at CERP’s option, the
Eurocurrency Rate (as defined in the First Lien Credit Agreement) plus 3.50% in the case of Eurocurrency Loans (as defined in the First Lien Credit Agreement) or the ABR (as defined in the First Lien Credit Agreement) plus 2.50% in the case of ABR
Loans (as defined in the First Lien Credit Agreement), with further reductions to the Eurocurrency Rate plus 3.25% or the ABR plus 2.25%, respectively, at such time as CERP’s Senior Secured Leverage Ratio (as defined in the First Lien Credit
Agreement) is less than or equal to 3.75 to 1.0 and (b) reduces the interest rate margins applicable to CERP’s existing approximately $2.4 billion term loan facility to, at CERP’s option, the Eurocurrency Rate plus 3.50% in the case
of Eurocurrency Loans or the ABR plus 2.50% in the case of ABR Loans. The portion of the Revolving Facility that was not repriced under the Amendment will remain in effect with the existing interest rate margins.
The representations, warranties and covenants contained in the Amendment were made only for purposes of the Amendment and as of the specific date (or dates)
set forth therein, were solely for the benefit of the parties to the Amendment and are subject to certain limitations as agreed upon by the contracting parties. In addition, the representations, warranties and covenants contained in the Amendment
may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries of the Amendment and should not rely on the representations, warranties and
covenants contained therein, or any descriptions thereof, as characterizations of the actual state of facts or conditions of CERP. Moreover, information concerning the subject matter of the representations and warranties may change after the date of
the Amendment, which subsequent developments may not be reflected in CEC’s public disclosure.
The description of the Amendment does not purport to
be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto, and is incorporated herein by reference.
Important Additional Information
Pursuant to the
Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2016, between CEC and Caesars Acquisition Company (“
CAC
”), as subsequently amended on February 20, 2017 (as amended, the “
Merger
Agreement
”), among other things, CAC will merge with and into CEC, with CEC as the surviving company (the “
Merger
”). In connection with the Merger, on March 13, 2017, CEC and CAC filed with the Securities and Exchange
Commission (the “
SEC
”) a registration statement on Form S-4 that includes a preliminary joint proxy statement/prospectus, as well as other relevant documents concerning the proposed transaction. The registration statement has not
yet become effective. After the registration statement is declared effective by the SEC, a definitive joint proxy statement/prospectus will be mailed to stockholders of CEC and CAC. Stockholders are urged to read the registration statement and joint
proxy statement/prospectus regarding the Merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy
of such joint proxy statement/prospectus, as well as other filings containing information about CEC and CAC, at the SEC’s website (www.sec.gov), from CEC Investor Relations (investor.caesars.com) or from CAC Investor Relations
(investor.caesarsacquisitioncompany.com).
The information in this communication is for informational purposes only and is neither an offer to purchase,
nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended,
and otherwise in accordance with applicable law.
CEC, CAC and their respective directors, executive officers and certain other members of management and
employees may be soliciting proxies from CEC and CAC stockholders in favor of the business combination transaction. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the CEC and
CAC stockholders in connection with the proposed business combination transaction is set forth in the definitive proxy statement filed with the SEC on April 12, 2017 and Amendment No. 1 to the Annual Report on Form 10-K for CAC’s
fiscal year ended December 31, 2016, filed on March 31, 2017, respectively. You can obtain free copies of these documents from CEC and CAC in the manner set forth above.
Forward-Looking Statements
This filing includes “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts and by the use of words such as “will,” “may,” “proposed” or the negative or
other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, the emergence from bankruptcy of Caesars Entertainment Operating Company, Inc. (“
CEOC
”) and the expected
timing thereof, future actions that may be taken by CEC and others with respect thereto, and the completion of the Merger. These forward-looking statements are based on current expectations and projections about future events.
You are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be
predicted or quantified and, consequently, the actual performance and results of CEC may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the
following factors, as well as other factors described from time to time in our reports filed with the SEC: the Merger may not be consummated or one or more events, changes or other circumstances could occur that could give rise to the termination of
the Merger Agreement, CEC’s and CEOC’s ability (or inability) to meet any milestones or other conditions set forth in their restructuring support agreements, CEC’s and CEOC’s ability (or inability) to satisfy the conditions to
the effectiveness of the Third Amended Joint Plan of Reorganization of CEOC and its Chapter 11 debtor subsidiaries, CEC’s ability (or inability) to secure additional liquidity to meet its ongoing obligations and its commitments to support the
CEOC restructuring as necessary, other risks associated with the CEOC restructuring and related litigation and CEC’s ability to meet a number of financial ratios and covenants in the First Lien Credit Agreement as amended by the Amendment.
You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date of this filing. CEC undertakes no
obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events, except as required by law.