Harrah's Entertainment Successfully Amends CMBS Loan Terms
Harrah's Entertainment, Inc. received unanimous consent from its commercial mortgage back securities (CMBS) lenders to amend the terms of approximately $5.5 billion in loans.
Under the revised terms, Harrah's will have the option to extend the CMBS loan maturity date to 2015 and Harrah's will have the ability to purchase CMBS loans at a discounted rate in the future. The amendments to the terms of the CMBS loans will become effective upon execution of definitive documentation.
"These revised terms for the CMBS loans represent the culmination of nearly two years of transformative activities that have allowed us to improve our balance sheet substantially; reducing our debt load by more than $4 billion while improving our liquidity and maturity profile," said Gary Loveman, chairman, CEO and president of Harrah's Entertainment. "We now have even greater financial flexibility as we have extended all of our maturities until 2015 and beyond."
As a part of this agreement, Harrah's has also agreed to purchase approximately $124 million face value of CMBS loans for $37 million, subject to the completion of the definitive documentation referenced above. Harrah's began purchasing discounted CMBS loans in the fourth quarter of 2009 and purchased approximately $950 million of face value loans for approximately $237 million. Pursuant to the amendments, the borrowers under the CMBS loans have agreed to pay the selling lenders an additional $48 million for the loans previously sold, subject to the completion of the definitive documentation.
Harrah's Entertainment, Inc. is the world's largest provider of branded casino entertainment. Since its beginning in Reno, Nevada, more than 70 years ago, Harrah's has grown through development of new properties, expansions and acquisitions, and now operates casinos on four continents.
