Gambling in the USA
Banks Promised $7 Billion for Eldorado to Acquire Caesars. Then the Coronavirus Hit

Banks that agreed to provide over $7 billion loan to Eldorado for the acquisition of Caesars now face an uphill battle to offload the debt to investors as fears over the coronavirus outbreak wreak havoc across the travel and leisure industry.
JPMorgan Chase & Co., Credit Suisse Group AG and Macquarie Group Ltd. agreed to the financing last June. Now, with the takeover expected to close as soon as next month, the underwriters are confronting a tight window to sell bond and loan buyers on the idea of lending to a highly leveraged gaming company just as Americans cancel their vacations, casinos empty out and the conference scene grinds to a halt.
“The best comparison might be 9/11, when people were scared to fly. Now people may be scared not only to travel but also to be in a casino with thousands of people,” Gene Neavin, senior investment analyst and portfolio manager at Federated Hermes, said.
To help justify the transaction, Eldorado is banking on about $500 million of cost savings for the combined company, a number that some analysts view as optimistic. The takeover will boost the company’s debt relative to a key measure of earnings to over seven times, according to credit-rating firms, possibly leading to a downgrade.
That funding– comprising about $2.4 billion of loans to Caesars and $4.8 billion of bonds and loans for Eldorado– is the largest and riskiest to potentially emerge since financial markets began their tailspin last month.
Beyond the broader concerns over global growth that have hamstrung the junk-bond and leveraged loan markets in recent weeks, the travel and leisure sector has been hit especially hard as flying restrictions and fear of contagion prompt people to cancel business trips and delay vacations.
Eldorado Chief Executive Officer Tom Reeg called on investors to stick with the company during an earnings call on Feb. 26, arguing that the deal faces “zero risk” on the financing side.
“We feel very good about the execution that we’ll get in the credit markets. This deal is closing. It’s closing soon,” Reeg said.
-
Latest News5 days ago
BitStarz Casino Review 2025: The Leading Crypto & Bitcoin Casino With Instant Withdrawal, Fast Payout & Latest Bonuses!
-
Latest News5 days ago
EGT Digital’s games are available to Bangbet’s customers in Tanzania
-
Interviews5 days ago
Scale isn’t everything: Why agility is the new advantage in live casino
-
Latest News4 days ago
BC.GAME Strengthens African Strategy with Dual Regulatory Approval in Kenya
-
eSports5 days ago
NODWIN Gaming and JioStar unveiling BGMS Season 4 with OnePlus as Title Partner and Android as Co-Title Partner
-
eSports5 days ago
The MongolZ Lift the Counter-Strike 2 at Esports World Cup Trophy, as Hero Run Ends in Title Triumph
-
Latest News5 days ago
HIPTHER Announces In-Person Events Rebrand, Baltics Focus & Digital Events Lounge for 2026
-
Latest News4 days ago
Rising Bonus Abuse in Sports Betting: Fraudsters Leveraging Hidden AI Powered Bots