Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CAESARS HOLDINGS, INC. | d908473d8k.htm |
Exhibit 99.1
| Open Issues Review | AWP / ACP - Privileged & Confidential | |||||
| ($ in millions)
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| CEC proposal | Bank counter | Difference | ||||
| Post-Petition Interest |
- $300 million - $75 million upfront |
- Full contract interest but no default interest - 8.1% or $437/annum |
- $137 / year - $33mm upfront | |||
| - 3 months interest paid up front ($108mm)
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| Additional cash payment |
- N/A | - Additional cash payment of $294mm as a make-whole - Payable on effective date
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- $294 million | |||
| Milestones | - Push out milestones by 3 months | - Accepted | - Discuss | |||
Page 1
| Interest |
AWP / ACP - Privileged & Confidential | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Filing Date | Statement | Confirm. | Drop Dead | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Bid / Ask | Jan-15 | Feb-15 | Mar-15 | Apr-15 | May-15 | Jun-15 | Jul-15 | Aug-15 | Sep-15 | Oct-15 | Nov-15 | Dec-15 | Jan-16 | Feb-16 | ||||||||||||||||||||||||||||||||||||||||||
| Current Offer ($300) |
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| Cash Received |
— | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | $ | 300 | |||||||||||||||||||||||||||||
| Effective Annual Interest |
— | 65.4 | % | 34.3 | % | 22.5 | % | 16.9 | % | 13.4 | % | 11.2 | % | 9.6 | % | 8.3 | % | 7.4 | % | 6.7 | % | 6.1 | % | 5.6 | % | 5.2 | % | |||||||||||||||||||||||||||||
| Bank Ask (Contract Rate) |
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| Cash Received |
— | $ | 37 | $ | 71 | $ | 108 | $ | 144 | $ | 181 | $ | 217 | $ | 254 | $ | 291 | $ | 327 | $ | 364 | $ | 400 | $ | 437 | $ | 467 | |||||||||||||||||||||||||||||
| Effective Annual Interest |
— | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | 8.1 | % | |||||||||||||||||||||||||||||
| Difference |
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| Cash Received |
— | $ | 263 | $ | 229 | $ | 192 | $ | 156 | $ | 119 | $ | 83 | $ | 46 | $ | 9 | ($ | 27 | ) | ($ | 64 | ) | ($ | 100 | ) | ($ | 137 | ) | ($ | 167 | ) | ||||||||||||||||||||||||
| Effective Annual Interest |
— | 57.3 | % | 26.3 | % | 14.4 | % | 8.8 | % | 5.3 | % | 3.1 | % | 1.5 | % | 0.3 | % | (0.7 | %) | (1.4 | %) | (2.0 | %) | (2.5 | %) | (2.9 | %) | |||||||||||||||||||||||||||||
| Current offer as % of Bank Ask |
809 | % | 425 | % | 279 | % | 209 | % | 166 | % | 139 | % | 118 | % | 103 | % | 92 | % | 82 | % | 75 | % | 69 | % | 64 | % | ||||||||||||||||||||||||||||||
Page 2
| $294 Ask Implies 85c Trading Price For PropCo 1L | AWP / ACP - Privileged & Confidential | |||||||||||||
($ in millions)
| PropCo 1L (to banks): |
$ | 1,961 | ||||||||||||||||||||||||||||||
| Total PropCo 1L Debt |
$ | 2,392 | ||||||||||||||||||||||||||||||
| PropCo 1L Leverage
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5.0x | |||||||||||||||||||||||||||||||
| Price |
100.0 | 99.0 | 98.0 | 97.0 | 96.0 | 95.0 | ||||||||||||||||||||||||||
| $ MTM |
— | ($ | 20 | ) | ($ | 39 | ) | ($ | 59 | ) | ($ | 78 | ) | ($ | 98 | ) | ||||||||||||||||
| % of Bank Recovery |
— | (0.4 | %) | (0.7 | %) | (1.1 | %) | (1.5 | %) | (1.8 | %) | |||||||||||||||||||||
| Implied Leverage |
5.0x | 5.0x | 4.9x | 4.9x | 4.8x | 4.8x | ||||||||||||||||||||||||||
| Implied YTM (1)
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5.0 | % | 5.2 | % | 5.5 | % | 5.7 | % | 5.9 | % | 6.2 | % | ||||||||||||||||||||
| Additional bank cash payment ask |
$ | 294 | ||||||||||||||||||||||||||||||
| Implied trading price of PropCo 1L |
85.0 | |||||||||||||||||||||||||||||||
| Implied EBITDA multiple |
4.3x | |||||||||||||||||||||||||||||||
| Implied YTM (1) |
8.8 | % | ||||||||||||||||||||||||||||||
| GLPI Cap Structure | ||||||||||||||||||||||||||||||||
| Rate | Book | Leverage | Price | Market | Leverage | CY | YTM | |||||||||||||||||||||||||
| $700mm RCF |
L+150 | 258 | ||||||||||||||||||||||||||||||
| Term Loan A |
L+150 | 300 | ||||||||||||||||||||||||||||||
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| Total Senior Debt |
L+150 | $ | 558 | 1.3x | N/A | $ | 558 | 1.3x | N/A | N/A | ||||||||||||||||||||||
| Nov 2023 Senior Unsecured |
5.375 | % | 500 | 104.3 | 521 | 5.16 | % | 4.77 | % | |||||||||||||||||||||||
| Nov 2020 Senior Unsecured |
4.875 | % | 1,000 | 104.1 | 1,041 | 4.68 | % | 4.06 | % | |||||||||||||||||||||||
| Nov 2018 Senior Unsecured |
4.375 | % | 550 | 103.0 | 567 | 4.25 | % | 3.48 | % | |||||||||||||||||||||||
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| Total Debt |
4.863 | % | $ | 2,608 | 6.2x | 103.0 | $ | 2,686 | 6.4x | 4.72 | % | 4.08 | % | |||||||||||||||||||
| GLPI LTM EBITDA |
$ | 423 | ||||||||||||||||||||||||||||||
| Average Yield GLPI bonds |
4.08 | % | ||||||||||||||||||||||||||||||
| PropCo 1L Interest |
L+350 | |||||||||||||||||||||||||||||||
| Implied PropCo trading price(1) |
104.1 | |||||||||||||||||||||||||||||||
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GLPI’s debt trades above par, even without a guarantee on its lease and with 1.2x greater leverage
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| (1) | Assuming 1.5% LIBOR swap rate, 5 year maturity |
Page 3
| Documentation Points | AWP / ACP - Privileged & Confidential |
| Accepted
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Lease
- Agree that CEOC “credit” can be made available for the Lease and CEOC can be added as a guarantor of the Lease.
- Generally agree the standard for Landlord having approval rights over alterations will be similar to Penn.
- Agree the list of permitted assignments by Tenant should be definitive.
- Agree to pay rent into a lockbox if required by Landlord’s lender.
- Open to listing specific provisions of the Lease that would be subject to alternative dispute resolution.
CPLV Mezz
- Agree that the Borrower will be an SPE with independent directors.
- Agree to a more straightforward default interest rate formula (3-5% above the coupon rate would be customary).
- Agree to a customary nonrecourse carveout guaranty and environmental indemnity. Presumably guarantor would be the REIT’s master limited partnership.
- Agree to provide a UCC policy and we agree to hard cash management with respect to interest due under the mezz loan.
- Agree to general reps, warranties and covenants (including negative covenants) that are consistent with the CPLV Market Debt.
- Agree to the lender flexibility relating to assignments/ participations/ syndications so long as the documents also provide customary borrower protections.
- Agree to a prohibition on subordinated debt/preferred equity by Mezz Borrower, so long as such prohibition does not apply to corporate/ parent-level debt.
RSA
- Can agree to consultation rights (but not consent) on operational issues, subject to materiality thresholds for new employment contracts, agreements with affiliates, etc.
- We can work with Banks to set a threshold for effectiveness of the RSA that accounts for the size of their group.
- If we are otherwise resolved, we would be able to agree to an MAE as long as its scope is properly defined.
| Open(1)
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- Amending RSA/Term Sheet: Must be able to amend deal without Banks’ consent to get Non-1Ls on board so long as changes don’t affect the Banks’ (or 1L Bonds’) economics. Same standard as in Bond RSA.
- CEC Termination Rights: CEC must have the same ability as the Banks do to terminate the RSA in certain circumstances.
- Guaranty/MLSA: CEC’s guaranty must be tied to CEC’s management of the properties.
- Rent issues: Fixed/variable.
- CPLV Market Debt: The market, not the CPLV Mezz Lenders, will determine terms of the CPLV Market Debt, but terms must fit within economic contraints (interest cap, $2.0bn)
| (1) | The open items do not include all of the open issues with regards to documentation, but highlight the substantive business level issues only. |
Page 5