NEW YORK (Reuters) – Harrah’s Entertainment Inc. has won approval from lenders to extend the maturity date on a $5.5 billion real estate loan, giving it until 2015 to pay off the debt, the company said on Monday.
Harrah’s, the world’s largest operator of casinos, will also have the ability to buy back the commercial mortgage-backed securities loan at a steep discount, helping it reduce debt, the casino company said in a statement.
“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 debt by more than $4 billion, Gary Loveman, the chairman and chief executive, said.
“We now have even greater financial flexibility as we have extended all of our maturities until 2015 and beyond,” he said.
As a part of the agreement, Harrah’s will purchase about $124 million face value of CMBS loans for $37 million.
Harrah’s has been grappling with a weak economy and heavy debt taken on after its $31 billion buyout by private equity firms Apollo Global Management LP and TPG Capital in 2008 $31 billion.
Harrah’s began purchasing discounted CMBS loans in the fourth quarter last year, buying back about $950 million of loans for about $237 million. Under the new amendments to the CMBS loans, lenders will receive an additional $48 million for loans previously sold, Harrah’s said. (Reporting by Dena Aubin; editing by Jeffrey Benkoe)