Caesars Entertainment had confirmed that the operator would not pay the interest, thus triggering a default on its + $18 billion debt. The operator elected not to pay, due to ongoing discussions with first line bondholders and creditors. The company delivered its non-payment through a regulatory filing on Monday.
Caesars senior management is currently locked in negotiations with creditors over its potential financial restructuring, however the company has failed to reach an agreement with the parties involved.
In November, Caesars said that CEOC would run out of liquidity by the fourth quarter next year and likely would not be able to continue as “a going concern.” In its last quarter financial earnings report the casino operator recorded net losses of $900 million (£570 million), even though it had managed to grow revenues 6% to $2.21 billion.
Caesars Entertainment raised investor concerns when the debt-strapped casino operator received a second default notice on debt repayments. US news reports had stated that the Caesars Entertainment could enter voluntary bankruptcy as early as January 2015.
The company has struggled since its 2008 leveraged buyout by TPG Capital and Leon Black Apollo GM to repay interest expenses on its debt load. Bloomberg News reported that it had been further with increased interest rate repayments and on-going accumulation of bad debt.