{"id":1006,"date":"2024-09-22T09:10:33","date_gmt":"2024-09-22T09:10:33","guid":{"rendered":"https:\/\/extraniceshirts.org\/?p=1006"},"modified":"2024-10-01T14:43:30","modified_gmt":"2024-10-01T14:43:30","slug":"caesars-long-term-bonds-look-appealing-says-analyst","status":"publish","type":"post","link":"https:\/\/extraniceshirts.org\/index.php\/2024\/09\/22\/caesars-long-term-bonds-look-appealing-says-analyst\/","title":{"rendered":"Caesars Long-Term Bonds Look Appealing, Says Analyst"},"content":{"rendered":"

The Federal Reserve\u2019s recent interest rate cut coupled with Caesars Entertainment\u2019s (NASDAQ: CZR) ongoing debt reduction efforts are among the reasons the casino operator\u2019s longer-dated bonds could be appealing to income investors.<\/p>\n

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Pedestrians walk the Las Vegas Strip near Caesars Entertainment’s Paris. An analyst says the company’s long-term bonds are appealing. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

In a new report to clients, GimmeCredit analyst Kim Noland noted Caesars could benefit from lower interest rates than some rivals because it has a higher portion of its debt in variable rate bonds than fixed rate equivalents. By some estimates, the Harrah\u2019s operator would save $91.1 million<\/a> in annual interest expenses if rates fall by 150 basis points, which some market observers believe could happen by the second quarter of 2025.<\/p>\n

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Caesars\u2019 debt reduction targets also suggest the company may address the significant amount of secured debt in the capital structure. Thus, we initiate coverage with a recommendation on the secured first lien debt, that we view as a better option than the unsecured debt in a weakening economy,\u201d observed Noland.<\/p>\n<\/blockquote>\n

She initiated coverage of Caesars 2032 bonds, which sport a yield-to-worst of 5.6%, with an \u201coutperform\u201d rating. Bonds with longer durations are more responsive to changes in interest rates.<\/p>\n

Caesars Applauded for Asset Sales<\/h2>\n

Following the 2020 merger with Eldorado Resorts that created \u201cnew Caesars,\u201d the gaming company was faced with a mountain of debt. Since then, the management team led by CEO Tom Reeg has made some progress on reducing that burden. Noland lauded those efforts.<\/p>\n

\u201cAsset pruning like the recent sale of World Series of Poker brand should also assist debt and leverage reduction,\u201d she wrote.<\/p>\n

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In September, the casino operator announced the sale of the intellectual property rights<\/a> associated with the World Series of Poker (WSOP) to investment firm NSUS Group Inc. for $500 million. Caesars gets an initial payment of $250 million with the remainder due in five years while retaining rights to use the WSOP brand for land-based poker tournaments.<\/p>\n<\/div>\n

Regarding further asset sales, another analyst recently floated the idea of Caesars selling the Linq Promenade on the Las Vegas Strip, which could result in a $700 million transaction. The company hasn\u2019t commented on that.<\/strong><\/p>\n

Keep an Eye on Ichan, Advises Gimme Credit<\/h2>\n

In her report, Noland mentioned that Carl Icahn\u2019s Icahn Enterprises<\/a> (NASDAQ: IEP) is again involved with the Horseshoe operator\u2019s shares. His company told investors in August it restarted a Caesars stake to the tune of 2.44 million shares.<\/p>\n

\u201cBondholders should remain vigilant for the potential of activist activity,\u201d advised the Gimme Credit analyst<\/strong>.<\/p>\n

Previously, Icahn was the architect of Eldorado\/\u201dold Caesars\u201d marriage. He recently said he\u2019s not eyeing activist action with the gaming company. It\u2019s also unlikely management is interested large-scale acquisitions and doesn\u2019t need Icahn\u2019s prodding to sell assets to pare debt.<\/p>\n

The post Caesars Long-Term Bonds Look Appealing, Says Analyst<\/a> appeared first on Casino.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve\u2019s recent interest rate cut coupled with Caesars Entertainment\u2019s (NASDAQ: CZR) ongoing debt reduction efforts are among the reasons the casino…<\/p>\n","protected":false},"author":1,"featured_media":1008,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[],"_links":{"self":[{"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/posts\/1006"}],"collection":[{"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/comments?post=1006"}],"version-history":[{"count":2,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/posts\/1006\/revisions"}],"predecessor-version":[{"id":1009,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/posts\/1006\/revisions\/1009"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/media\/1008"}],"wp:attachment":[{"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/media?parent=1006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/categories?post=1006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/extraniceshirts.org\/index.php\/wp-json\/wp\/v2\/tags?post=1006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}