Is Caesars Bound for Bankruptcy?
Fitch Ratings Service said Wednesday it downgraded its view on Caesars Entertainment Corp. from stable to negative, hinting that the casino operator could look at Chapter 11 bankruptcy protection as a method to restructure its sizable debt.
Another option could include spinning off the Caesars Interactive Division as a separate public company. Caesars Interactive oversees the World Series of Poker.
“The outlook revision reflects Fitch’s heightened concern regarding (Caesars) near-to-medium term cash burn rate and potential covenant compliance pressure,” Fitch analyst Michael Paladino wrote in a report to investors. “These factors, combined with previously expressed concerns about weakening relative asset quality due to constrained capital reinvestment, more than offset the positive credit impact from recent transactions executed to push out its debt maturities meaningfully.”
