Research Update: CBAC Borrower LLC Upgraded To 'B' On Caesars Entertainment Inc.'s Improved Credit Strength, Outlook Stable

Our view of the credit strength of CBAC Borrower LLC's parent, Caesars Entertainment Inc., has improved due to its solid operating performance over the past three quarters, the significant moderation in its digital losses, and our expectation that the ongoing recovery in the Las Vegas market will reduce its leverage below 7x this year, despite rising macroeconomic risks. We believe the Horseshoe Baltimore is strategically important to Caesars. Therefore, Caesars' majority ownership of CBAC and the potential it would support the company improve our view of CBAC's credit profile. We raised our issuer credit rating on CBAC to 'B' from 'B-'. At the same time, we also raised our issue-level rating on CBAC's senior secured credit facility by one notch,

...- Our view of the credit strength of CBAC Borrower LLC's parent, Caesars Entertainment Inc., has improved due to its solid operating performance over the past three quarters, the significant moderation in its digital losses, and our expectation that the ongoing recovery in the Las Vegas market will reduce its leverage below 7x this year, despite rising macroeconomic risks. - We believe the Horseshoe Baltimore is strategically important to Caesars. Therefore, Caesars' majority ownership of CBAC and the potential it would support the company improve our view of CBAC's credit profile. - We raised our issuer credit rating on CBAC to 'B' from 'B-'. At the same time, we also raised our issue-level rating on CBAC's senior secured credit facility by one notch, to 'B' from 'B-'. The '3' recovery rating reflects our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in a payment default. - The stable outlook reflects our expectation that, even though CBAC's leverage...

Research Update