The Wall Street Skinny
39. LBO Deep Dive: Caesars Palace Coup, Part I
Dec 16, 2023
In this episode, the hosts do a deep dive into a $30bn LBO of Caesars Palace by Apollo and TPG. They discuss the deal structure, financing terms, and motivations of private equity titans. The podcast explores leverage buyouts, restructuring, and the roles of parent company, operating company, and subsidiary. It also provides an overview of LBO structure and the background of the deal.
35:51
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The Caesars Palace LBO deal involved a partnership between Apollo and TPG, with a total of $6 billion in equity contributions, highlighting the club deal trend of the early 2000s and the benefits of co-investing.
- The debt structure of the Caesars Palace LBO deal was complex, with bank loans, bridge loans, and CMBS funding totaling $24 billion, showcasing the unique combination of covenant-light debt and the absence of debt covenants triggered by a change of control.
Deep dives
Overview of the Podcast Episode
In this episode of The Wall Street Skinny, the hosts dive into the intricacies of a high-stakes LBO (leveraged buyout) involving Caesar's Palace. They discuss the structure of the deal, including the equity contributions and the various forms of debt, such as bank loans, bridge loans, and CMBS funding. They highlight the uniqueness of the deal and the challenges it faced during the 2008 financial crisis. The hosts also touch on the concept of covenant light debt and the impact of a change of control provision. The episode sets the stage for the upcoming episodes, which will delve into the drama and aftermath of the LBO.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
