* Debt restructuring likely agreed within a year-CEO
* Raising funds for Japan would not be a problem-CEO
(Adds background on Japan casino sector, CEO quote)
By Nathan Layne and Emi Emoto
TOKYO, June 26 Caesars Entertainment Corp
will likely agree to a debt restructuring with
bondholders within a year and should have no problem financing a
foray into the Japanese market, the debt-strapped casino
operator's chief executive said on Thursday.
Gary Loveman said he believed Caesars' finances - its debt
carries a speculative grade rating - would not put it at a
disadvantage as it seeks a licence in Japan, where a bill to
legalise casinos could be put to a vote in parliament this year.
"A licence in Japan will be so attractive that raising the
money is not likely to be a big problem," Loveman said in an
interview with Reuters, adding that he was talking with
potential partners for a possible entry into Japan.
Caesars is one of a dozen or so global operators that have
been jockeying for position in Japan, which brokerage CLSA
estimates could eventually generate $40 billion in annual gaming
revenues, making it the second-biggest Asian market after Macau.
Loveman said it was too early to put a figure on how much
Caesars might invest before tax rates, partnerships and other
important factors are decided. Caesars plans to compete for a
licence in Tokyo and Osaka as well as in potential sites outside
the big cities, such as Hokkaido or Okinawa, he said.
Standard and Poor's has a CCC- long-term issuer rating on
the company, a reflection of the $23 billion in debt on its
balance sheet. The bulk of that debt is housed in a subsidiary
called Caesars Entertainment Operating Company (CEOC).
Earlier this month owners of CEOC second-lien bonds issued a
notice of default, claiming its transfer some of assets to
another unit and the removal of a parent company guarantee
marked a default on obligations.
Caesars said in a filing that it did not believe a default
had occurred, arguing that fair value on the asset sales had
been determined based on a thorough and independent process.
With some $3 billion in cash, Loveman said there was no risk
of CEOC going bankrupt. He said he expected to work out a
settlement with creditors on debt restructuring within a year,
clearing one important hurdle by the time Japan could start the
application process for casino licenses in 2016.
"I am quite confident that the circumstances of this entity
(CEOC) will be resolved," Loveman said, adding that a settlement
would likely involve the swapping of cash, equity or new debt
securities with lower interest expenses or longer maturities.
Caesars views Japan as an important component of its Asia
strategy after it failed to secure a spot in Macau, the world's
largest gambling hub. It would also complement a planned foray
into South Korea, where the U.S. operator is building a gaming
resort after receiving preliminary approval in March.
Japan's Prime Minister Shinzo Abe has thrown his weight
behind casinos as a way to revitalise the economy, fueling
confidence among proponents that the casino bill will be passed
during a special session of parliament expected in October.
(Editing by Edmund Klamann and Matt Driskill)