On November 25, 2024, Caesars Entertainment, Inc. (CZR, Financial), a leading player in the gaming and hospitality industry, announced a significant amendment to its existing Credit Agreement. The Fifth Amendment to the Credit Agreement, executed with the participation of various lenders and JPMorgan Chase Bank, N.A. as the administrative agent, introduces favorable changes to the company's financial arrangements.
The amendment specifically targets the interest rate margins applicable to Caesars Entertainment's approximately $2.4 billion term B loan facility and $2.9 billion term B-1 loan facility. The company now has the option to choose between a forward-looking term rate based on the secured overnight financing rate (Term SOFR) with a floor of 0.50%, or a base rate determined by the highest of the Prime Rate, the federal funds rate plus 0.50%, or the one-month Term SOFR plus 1.00%, each with an applicable margin.
For both the term B and term B-1 loans, the applicable margin is set at 2.25% per annum for Term SOFR loans and 1.25% per annum for Base Rate loans. This adjustment is expected to provide Caesars Entertainment with more favorable borrowing terms, potentially enhancing its financial flexibility and reducing interest expenses.
It is important to note that the representations, warranties, and covenants in the amendment are crafted solely for the benefit of the parties involved and may not reflect the actual state of affairs of the company. Investors are advised not to rely solely on these provisions for assessing the company's condition.
This strategic financial move by Caesars Entertainment underscores its commitment to optimizing its capital structure and maintaining robust financial health. For more detailed information, stakeholders are encouraged to review the full text of the amendment.
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