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The looters of Caesars Palace, whom we recently discussed, are having second thoughts...
On Monday, it was announced that Caesars Entertainment Corp. (Nasdaq: CZR) would acquire affiliate Caesars Acquisition Co. in a stock-for-stock merger.
The move will reassemble some of the pieces that were stolen by the company's private equity owners in an ill-advised attempt to restructure the company's debts on the backs of its creditors.
The merger will consolidate the company's stake in properties such as Planet Hollywood, Bally's Las Vegas, the new Horseshoe Casino in Baltimore, and its Internet gaming businesses with its flagship Caesars Palace property in Las Vegas.
In an unstable economy, bond payment failures take on added import as bellwethers of ailing markets.
Especially when they involve large, well-known corporations.
On December 15, Caesars Entertainment failed to make a $225 million interest payment on its 10% Second Lien Notes due 2018.
Caesars has a 30-day grace period to make the payment or be declared in default.
On Friday, December 12, it was reported that negotiations with senior creditors regarding a debt restructuring had broken down.
This comes as no surprise to those of us who have been watching one of the ugliest situations in the debt markets unfold over the past couple of years.
Stock market close, June 27, 2014: The Dow Jones Industrial Average today (Friday) was flat despite a rise in consumer sentiment. Next week, look for a heavy slate of economic reports, including the June unemployment report, factory orders, and the ISM manufacturing composite index.