Published on: October 2, 2024, 02:51h.
Last updated on: October 2, 2024, 02:51h.
Caesars Entertainment (NASDAQ: CZR) has announced a $500 share buyback program and plans to sell $1 billion in corporate bonds.
This move marks the first return of capital to shareholders by the gaming company in years and is in line with expectations of reducing debt by repurchasing stock. Caesars stated in a Form 8-K filing with the SEC that the buyback plan is not final and the start date will depend on market conditions.
During the third quarter of 2024, the Company repurchased 3,872,478 shares of its common stock at an average price of $36.38 per share under a previous buyback program. With these repurchases, the Company has exhausted its remaining shares available for repurchase under the program.
Following the announcement, Caesars’ shares surged over 4% on higher-than-average volume, continuing a 17% increase over the last month.
Caesars Selling Bonds to Reduce Debt
Caesars also revealed plans to sell $1 billion in corporate bonds maturing in 2032 to retire existing near-term debt obligations.
“The proceeds from the bond offering will be used to tender, redeem, or repurchase a portion of the Company’s existing 8.125% Senior Notes due in 2027, as well as cover fees and expenses related to the offering and redemptions,” the company stated.
Earlier in the year, Caesars sold $1.5 billion of commercial paper maturing in 2032 to address upcoming debt obligations. This strategy aligns with the company’s goal of reducing leverage by extending maturity dates and eliminating high-yield debt.
Caesars’ successful debt sale underscores the gaming industry’s favorable access to credit. Competitors MGM Resorts International (NYSE: MGM) and Wynn Resorts (NASDAQ: WYNN) also recently issued new bonds.
Caesars Provides Update on WSOP Sale
In September, Caesars announced the sale of World Series of Poker (WSOP) intellectual property rights to NSUS Group Inc. for $500 million. The company expects to receive the initial $250 million payment by the end of the year.
According to the SEC filing, “The majority of the net proceeds from the WSOP IP sale will be used to repay secured debt or reinvest in the business. The remaining $250 million owed by NSUS is due to Caesars five years after the transaction closing.”