September 15, 2009

Harrah’s buying Planet Hollywood debt

Las Vegas casino giant Harrah's Entertainment may be buying Planet Hollywood Resort debt to move in on an asset acquisition, market analysts said.

Officials from both Harrah's and Planet Hollywood declined to comment on the reported deal making, but sources said Harrah's had purchased a portion of Planet Hollywood's $860 million debt that is leveraged against its Las Vegas property, the Las Vegas Review-Journal reported Tuesday.

With covenant and debt defaults looming around for some of these properties, it's a potential way to gain eventual ownership of a property, said market analyst Brian Gordon at Applied Analysis.

Finance professor Mike Sullivan of the University of Nevada, Las Vegas said, Harrah's is buying a position on the cheap right now but with long term ideas.

They've got their foot in the door. They are picking up a position of influence, so they must be interested in acquiring assets, he said.

If Harrah's picks up the Planet Hollywood property, it would give the company 10 casinos on or near the famous Las Vegas Strip, the newspaper said.