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Long-Term Debt | 9 Months Ended
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Sep. 30, 2020
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following:
| September 30, 2020 |  | December 31, 2019
(Dollars in millions) | Final Maturity |  | Rates |  | Face Value |  | Book Value |  | Book Value
Secured Debt |  |  |  |  |  |  |  |  |
CEI Senior Secured Notes | 2025 |  | 6.25% |  | $ | 3,400 |  |  | $ | 3,330 |  |  | $ | — |
CEI Revolving Credit Facility | 2025 |  | variable (a) |  | 900 |  |  | 880 |  |  | — |
ERI Term Loan | N/A |  | N/A |  | — |  |  | — |  |  | 491 |
CRC Term Loan B | 2024 |  | variable (b) |  | 4,571 |  |  | 4,120 |  |  | — |
CRC Term Loan B-1 | 2025 |  | variable (c) |  | 1,800 |  |  | 1,709 |  |  | — |
CRC Revolving Credit Facility | 2022 |  | variable (d) |  | — |  |  | — |  |  | — |
CRC Senior Secured Notes | 2025 |  | 5.75% |  | 1,000 |  |  | 978 |  |  | — |
Convention Center Mortgage Loan | 2025 |  | 7.70% |  | 400 |  |  | 397 |  |  | — |
Lumière Loan | N/A |  | N/A |  | — |  |  | — |  |  | 246 |
Unsecured Debt |  |  |  |  |  |  |  |  |
CEI Senior Notes | 2027 |  | 8.13% |  | 1,800 |  |  | 1,767 |  |  | — |
CRC Notes | 2025 |  | 5.25% |  | 1,700 |  |  | 1,490 |  |  | — |
5% Convertible Notes | 2024 |  | 5.00% |  | 597 |  |  | 546 |  |  | — |
6% Senior Notes | 2026 |  | N/A |  | — |  |  | — |  |  | 582 |
6% Senior Notes | 2025 |  | N/A |  | — |  |  | — |  |  | 879 |
7% Senior Notes | 2023 |  | N/A |  | — |  |  | — |  |  | 370 |
Special Improvement District Bonds | 2037 |  | 4.30% |  | 51 |  |  | 51 |  |  | — |
Long-term notes and other payables |  |  |  |  | 2 |  |  | 2 |  |  | 3 |
Total debt |  | 16,221 |  |  | 15,270 |  |  | 2,571 |
Current portion of long-term debt |  | (67) |  |  | (67) |  |  | (246) |
Long-term debt |  | $ | 16,154 |  |  | $ | 15,203 |  |  | $ | 2,325 |
Unamortized premiums, discounts and deferred finance charges (e) |  |  |  | $ | 951 |  |  | $ | 34 |
Fair value |  | $ | 16,135 |  |  |  |  |
____________________ (a)Prime rate plus 2.25%. (b)LIBOR plus 2.75%. (c)$1.2 billion at 1 month LIBOR plus 4.50% and $600 million at 3 month LIBOR plus 4.50%. (d)LIBOR plus 2.00%. (e)Approximately $7 million of deferred financing costs related to our revolving credit facilities are included within Other assets, net as of December 31, 2019. Current Portion of Long-Term Debt The current portion of long-term debt as of September 30, 2020 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are contractually due within 12 months. Debt Discounts or Premiums and Deferred Finance Charges Debt discounts or premiums and deferred finance charges incurred in connection with the issuance of debt are amortized to interest expense based on the related debt agreements primarily using the effective interest method. Unamortized discounts are written off and included in our gain or loss calculations to the extent we extinguish debt prior to its original maturity date. Fair Value The fair value of debt has been calculated primarily based on the borrowing rates available as of September 30, 2020 based on market quotes of our publicly traded debt. We classify the fair value of debt within Level 1 and Level 2 in the fair value hierarchy. New Debt Transactions The Company was party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (as amended the “ERI Credit Facility”), consisting of a $1.5 billion term loan facility (the “ERI Term Loan”) and a $500 million revolving credit facility (the “ERI Revolving Credit Facility”). In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 continued to evolve and impact global financial markets, the Company borrowed $465 million under the revolving credit facility on March 16, 2020, which we repaid in July 2020 utilizing, in part, proceeds from the sale of the Company’s interests in Kansas City and Vicksburg. On July 6, 2020, Colt Merger Sub, Inc., a wholly-owned subsidiary of the Company (the “Escrow Issuer”), issued $3.4 billion aggregate principal amount of 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes”), $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “CEI Senior Notes”) and $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”). On July 20, 2020, in connection with the closing of the Merger, the Company entered into a new credit agreement (“CEI Credit Agreement”), which provide a five-year senior secured revolving credit facility in an aggregate principal amount of $1.2 billion (the “CEI Revolving Credit Facility”). In addition, Caesars Resort Collection, LLC (“CRC”) entered into incremental amendments to the CRC Credit Agreement (described below), which provided a $1.8 billion incremental term loan. A portion of the proceeds from these arrangements was used to prepay in full the loans outstanding and terminate all commitments under the ERI Credit Facility, and to satisfy and discharge the Company’s 6% Senior Notes due 2025, 6% Senior Notes due 2026, and the 7% Senior Notes due 2023. The 6% Senior Notes due 2025 were redeemed at a redemption price of 104.5%, the 7% Senior Notes due 2023 were redeemed at a redemption price of 103.5%, and $210 million aggregate principal amount of the 6% Senior Notes due 2026 was redeemed at a redemption price of 106% with the remaining balance redeemed at a redemption price of 100% of the aggregate principal amount thereof plus the Applicable Premium, as defined in the indenture for the 6% Senior Notes due 2026. The redemption of the senior notes resulted in a loss on extinguishment of debt of $132 million during the three and nine months ended September 30, 2020, which is recorded within Other (loss) income on the Statement of Operations. CEI Senior Secured Notes due 2025 On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.25% Senior Secured Notes due 2025 pursuant to an indenture dated July 6, 2020 (the “CEI Senior Secured Notes Indenture”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent. The Company assumed the rights and obligations under the CEI Senior Secured Notes and the Senior Secured Notes Indenture on July 20, 2020. The CEI Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021. CEI Senior Notes due 2027 On July 6, 2020, the Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July 6, 2020 (the “CEI Senior Notes Indenture”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. The Company assumed the rights and obligations under the CEI Senior Notes and the CEI Senior Notes Indenture on July 20, 2020. The CEI Secured Notes will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021. CRC Senior Secured Notes due 2025 On July 6, 2020, the Company issued $1.0 billion in aggregate principal amount of 5.75% Senior Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes Indenture”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands Branch, as collateral agent. In connection with the consummation of the Merger, CRC assumed the rights and obligations under the CRC Senior Secured Notes and the CRC Senior Secured Notes Indenture. The CRC Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021. CEI Revolving Credit Facility On July 20, 2020, the Escrow Issuer entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto, which provide for a five-year CEI Revolving Credit Facility in an aggregate principal amount of $1.2 billion. The CEI Revolving Credit Facility matures in 2025 and includes a letter of credit sub-facility of $250 million. The interest rate per annum applicable under the CEI Revolving Credit Facility, at the Company’s option is either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by JPMorgan Chase Bank, N.A. and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be 3.25% per annum in the case of any LIBOR loan and 2.25% per annum in the case of any base rate loan, subject to three 0.25% step-downs based on the Company’s total leverage ratio. Additionally, the Company is required to pay a commitment fee in respect of any unused commitments under CEI Revolving Credit Facility in the amount of 0.50% of principal amount of the commitments of all lenders, subject to a step-down to 0.375% based upon the Company’s total leverage ratio. The Company is also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit. The Company had $266 million of available borrowing capacity, after consideration of $19 million in outstanding letters of credit under CEI Revolving Credit Facility, as of September 30, 2020. The Company paid down $900 million subsequent to September 30, 2020. Convention Center Mortgage Loan On September 18, 2020, the Company entered into a loan agreement with VICI to borrow a 5-year, $400 million Forum Convention Center mortgage loan (the “Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which escalates annually to a maximum interest rate of 8.3% per annum. Assumed Debt Activity Former Caesars and its subsidiaries incurred the following indebtedness that remained outstanding following the consummation of the Merger. CRC Term Loans and CRC Revolving Credit Facility CRC is party to the Credit Agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which included a $1.0 billion five-year revolving credit facility (the “CRC Revolving Credit Facility”) and an initial $4.7 billion seven-year first lien term loan, which was increased by $1.8 billion pursuant to an incremental agreement executed in connection with the Merger (the “CRC Term Loan”). The CRC Term Loan matures in 2024. The CRC Revolving Credit Facility matures in 2022 and includes a letter of credit sub-facility. The CRC Term Loan requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount, with the balance due at maturity. The CRC Credit Agreement also includes customary voluntary and mandatory prepayment provisions, subject to certain exceptions. As of September 30, 2020, approximately $64 million was committed to outstanding letters of credit. As of September 30, 2020, there were no borrowings outstanding under the CRC Revolving Credit Facility. Borrowings under the CRC Credit Agreement bear interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by Credit Suisse AG, Cayman Islands Branch, as administrative agent under the CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be (a) with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, (b) with respect to the CRC Incremental Term Loan, 4.50% per annum in the case of any LIBOR loan or 3.50% in the case of any base rate loan and (c) in the case of the CRC Revolving Credit Facility, 2.25% per annum in the case of any LIBOR loan and 1.25% per annum in the case of any base rate loan, subject in the case of the CRC Revolving Credit Facility to two 0.125% step-downs based on CRC’s senior secured leverage ratio (“SSLR”), the ratio of first lien senior secured net debt to adjusted earnings before interest, taxes, depreciation and amortization. The CRC Revolving Credit Facility is subject to a financial covenant discussed below. In addition, CRC is required to pay a commitment fee in respect of any commitments under the CRC Revolving Credit Facility in the amount of 0.50% of the principal amount of the commitments, subject to step-downs to 0.375% and 0.25% based upon CRC’s SSLR. CRC is also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit. CRC Notes On October 16, 2017, CRC issued $1.7 billion aggregate principal amount of 5.25% senior notes due 2025 (the “CRC Notes”). Former Caesars 5% Convertible Notes On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5.00% convertible senior notes maturing in 2024 (the “5% Convertible Notes”). The 5% Convertible Notes are convertible into the weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As of September 30, 2020, we have paid approximately $574 million and issued approximately 6.8 million shares upon conversion of $487 million in aggregate principal amount of the 5% Convertible Notes during 2020. Through November 2, 2020, we paid an additional $328 million and issued 3.9 million shares upon conversion of an additional $281 million of the 5% Convertible Notes. The Company has determined that the 5% Convertible Notes contain derivative features that require bifurcation. The Company separately accounts for the liability component and equity conversion option of the 5% Convertible Notes. The difference between the overall instrument value and the value of the liability component was assumed to be the value of the equity conversion option component. The value of the liability is determined based on a discounted cash flow of the debt instrument. See Note 11 for more information on the 5% Convertible Notes’ fair value measurements. Net amortization of the debt issuance costs and the discount and/or premium associated with the Company’s indebtedness totaled $34 million and $2 million for the three months ended September 30, 2020 and 2019, respectively, and $37 million and $6 million for the nine months ended September 30, 2020 and 2019 respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense.
Annual Estimated Debt Service Requirements as of September 30, 2020 |  |  |  |
| Remaining |  | Years Ended December 31, |  |  |  |
(In millions) | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | Thereafter |  | Total
Annual maturities of long-term debt | $ | 16 |  |  | $ | 67 |  |  | $ | 67 |  |  | $ | 67 |  |  | $ | 5,036 |  |  | $ | 10,968 |  |  | $ | 16,221 |
Estimated interest payments | 200 |  |  | 850 |  |  | 820 |  |  | 790 |  |  | 790 |  |  | 690 |  |  | 4,140 |
Total debt service obligation (a) | $ | 216 |  |  | $ | 917 |  |  | $ | 887 |  |  | $ | 857 |  |  | $ | 5,826 |  |  | $ | 11,658 |  |  | $ | 20,361 |
____________________ (a)Debt principal payments are estimated amounts based on maturity dates and potential borrowings under our revolving credit facilities. Interest payments are estimated based on the forward-looking LIBOR curve and include the estimated impact of the ten interest rate swap agreements related to our CRC Credit Facility (see Note 11). Actual payments may differ from these estimates. Lumière Loan The Company borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière, which was scheduled to mature on October 1, 2020. On June 24, 2020, the Company received approval from Missouri Gaming Commission to sell Lumière to GLPI and leaseback the property under a long-term financing obligation. As of September 30, 2020, the Lumière real estate has been refinanced under a financing obligation. See Note 9. Debt Covenant Compliance The CRC Credit Agreement, the CEI Revolving Credit Facility and the indentures governing the CEI Senior Secured Notes, the CEI Senior Notes, the CRC Senior Secured Notes and the CRC's 5.25% senior notes due 2025 (the “CRC Notes”) contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit the Company’s and its subsidiaries’ ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions. The indenture for the 5% Convertible Notes contained limited covenants as a result of amendments that became effective in connection with the consummation of the Merger. The CRC Revolving Credit Facility and CEI Revolving Credit Facility include a maximum first-priority net senior secured leverage ratio financial covenant of 6.35:1, which is applicable solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt document. The Company’s results of operations have been materially adversely affected by the impacts of the COVID-19 public health emergency. As a result, the current terms of the CEI Credit Agreement and the CRC Credit Agreement provide that the financial covenant measurement period is not effective through September 30, 2021 so long as the Company and CRC, respectively, comply with a minimum liquidity requirement, which includes any such availability under the applicable revolving credit facilities. As of September 30, 2020, the Company was in compliance with all of the applicable financial covenants under the CEI Credit Agreement, the CRC Credit Agreement, CEI Senior Secured Notes, CEI Senior Notes, and CRC Senior Secured Notes, 5% Convertible Notes and CRC Notes. Guarantees The CEI Revolving Credit Facility and the CEI Senior Secured Notes are guaranteed on a senior secured basis by each existing and future material wholly-owned domestic subsidiary of CEI (subject to certain exceptions) and are secured by substantially all of the existing and future property and assets of CEI and its subsidiary guarantors (subject to certain exceptions). The CEI Senior Notes are guaranteed on a senior unsecured basis by such subsidiaries. The CRC Credit Agreement and the CRC Senior Secured Notes are guarantees on a senior secured basis by each existing and future material wholly-owned domestic subsidiary of CRC (subject to certain exceptions) and are secured by substantially all of the existing and future property and assets of CEI and its subsidiary guarantors (subject to certain exceptions). The CRC Notes are guaranteed on a senior unsecured basis by such subsidiaries.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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