Caesars Entertainment On Verge of Bankruptcy?

Back in April Moody’s downgraded Caesars Entertainment’s credit rating to Caa status.  Moody’s ratings from best to worst go as follows:  Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C.  As you can see Moody’s doesn’t have a lot of confidence in the iconic hotel and casino company in the heart of the Las Vegas strip.

To make matters worse, a Las Vegas newsletter with a circulation of over 60,000 has advised against even making reservations at Caesars for fear that the company’s bankruptcy filing is imminent.  The advice, however, is fearmongering for a couple of reasons.

First, there is no evidence that the company will be declaring bankruptcy now or in the near future.  The company has remained mum on the issue.

Second, even if Casesar’s does file for bankruptcy protection it will be under Chapter 11 which allows for reorganization of the company’s debts and assets, which means that hotel reservations will not be affected.  In fact, reorganizing under bankruptcy laws can benefit companies in many ways.  Look at the Station Casinos in Las Vegas which emerged from bankruptcy protection a couple of years ago.  The casinos are thriving and the company is actually stronger now.

While Caesars may be suffering from poor credit, the company is likely to be around for a very long time.

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