April 9, 2009 / 4:58 PM / in 10 years

Harrah's cuts debt by $2.3 bln in exchange offer

LOS ANGELES, April 9 (Reuters) - Harrah’s Entertainment Inc [HAMLEH.UL], the world’s largest casino operator, reduced its debt by about $2.3 billion in a debt-exchange offer that expired this week, the Las Vegas company said on Thursday.

Harrah’s said it accepted exchange notes with a principal amount of $5.55 billion, which it will exchange for $3.4 billion in new 10 percent notes due 2018 and about $102 million in cash.

The new debt has a longer maturity and, in some cases, a higher interest rate.

The company also replaced $442 million in bridge loans with the new 2018 notes valued at $297 million.

Harrah’s, which was taken private in a 2008 leveraged buyout by Apollo Management and TPG Capital LP [TPG.UL], has struggled to meet debt costs as the global recession reduces cash flow at its casinos.

The company said it paid $2.1 billion in interest and other debt expenses last year. (Reporting by Deena Beasley; Editing by Andre Grenon)

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