The Wall Street Skinny 41. Caesars Part III: Interview with Sujeet Indap, Author of Caesars Palace Coup
Dec 31, 2023
In this episode, Sujeet Indap, Financial Times writer and author of 'Caesars Palace Coup', discusses securitization, distressed debt investing, and the future of private credit. He shares insights from interviewing industry titans and delves into the role of women in private investing. The podcast also covers the high-profile leverage buyout of Caesars Palace, the complexities of its capital structure, and the challenges of writing a book on a controversial event.
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LBO Capital Structure Basics
- In a typical LBO, equity holders risk losing their investment but get the upside if the company succeeds.
- Debt holders get paid first but have no control over the company's operations though they bear less risk.
Distressed Debt Defined
- Distressed debt trades below par when investors doubt full repayment.
- Distressed debt investing has become a distinct asset class with its own investors focused on these risks and opportunities.
Complex Restructurings and Conflicts
- Private equity used creative asset transfers between entities to keep Caesars operational and delay creditor repayment.
- This maneuver caused conflicts of interest as the controlling parent prioritized its own interests over creditors'.