Harrah’s Entertainment, backed by Apollo Global Management and TPG, has tendered nearly $5 billion in bonds, allowing the casino operator to push back the maturity dates of its near-term debt as it seeks to avoid a default.
Since last year, the company has been looking for ways to restructure debt that comes due between 2010 and 2018, as it may not be able to meet its payments because of declining revenues. The company recently said its revenues for 2008 fell 6.5 percent last year to $10.1 billion, while reporting a loss of $4.3 billion.
Harrah’s has offered to exchange the bonds for $2.8 billion in 10 percent second-priority senior secured notes due in 2018. Apollo, TPG and certain co-investors have also increased their cash tender offer for 10 percent second-priority senior secured notes due in 2015 and 2018 from $250 million to $350 million.
Apollo and TPG acquired Harrah’s in January 2008 for $17.1 billion, or $90 a share, with another $10.7 billion assumed in debt. Apollo, which put up $1.3 billion in equity toward the deal, marked down its investment in the casino operator by 25 percent last summer.
Meanwhile, the firm is also looking to take a substantial ownership stake in Charter Communications as part of a bankruptcy restructuring by the cable operator, according to the Wall Street Journal. The company plans to file for Chapter 11 on or before 1 April, after reporting a loss of operations in the fourth quarter of $1.3 billion compared to $85 million a year before.
Apollo, which controls a large portion of Charter’s debt, will reportedly swap it for equity in the new post-bankruptcy company, with Microsoft co-founder Paul Allen retaining his current voting control.