Park Place sells $300 million of notes

Thursday, July 29, 1999 | 11:31 a.m.

The company, which operates Hilton and Grand hotel-casinos and is acquiring Caesars World Inc., said proceeds from the offering would be used to pay down bank debt.

Park Place may redeem the notes in whole, but not in part, at any time before maturity by paying a premium on the coupon rate. The notes haven't been registered for public trading.

Duff & Phelps Credit Rating Co. assigned a "BBB-Minus" rating to the restricted notes and reaffirmed its "BB-Plus" and "D-3" ratings on Park Place's outstanding $400 million of senior subordinated notes and $1 billion commercial paper program, respectively.

"A large and highly diversified asset base, low capital costs and good financial flexibility support the ratings," DCR said.

"Offsetting factors include near-term threats of gaming oversupply on the Las Vegas Strip and the Mississippi Gulf Coast, which could lead to reduced operating cash flows, and the potential for share repurchases and debt-financed acquisitions," the rating agency said.

DCR noted that the pending $3 billion Caesars merger makes it less likely Park Place will attempt more debt-financed acquisitions in the near future. The merger and the opening of Paris-Las Vegas in September will give Park Place 29 casinos and 28,740 hotel rooms in the United States and abroad.