UPDATE: Statement from Caesars Entertainment Oper. Co. Confirms Objection to Credit Notice

Caesars Entertainment Operating Company, Inc. (CEOC or the Company) today announced its objection to a notice of default sent by a minority group of holders of one tranche of second lien notes issued by the Company. The Company believes that the claims in the notice are baseless and will defend itself vigorously against any action taken by these creditors. “We will not allow our company, our employees and the communities in which we operate to be held hostage by a minority of holders whose interests are contrary to the long-term health of the Company,” said Gary Loveman, chairman and chief executive officer of Caesars Entertainment Corporation (CEC). The Company, its parent, CEC, and its private equity sponsors have acted responsibly to improve performance through investment in the business, capital structure management and operational improvement. Over the past several years, the Company and its affiliates have completed nearly 50 capital markets transactions have been completed and more than $3 billion has been invested to expand and upgrade the Caesars network. Recent transactions, including the sale of assets to Caesars Growth Partners, followed a rigorous, independent process which garnered fair value for CEOC and provided it with liquidity crucial to its business and capital structure plans. The process included special committees comprised of independent directors of CEC and Caesars Acquisition Company. Each committee received independent legal and financial advice and fairness opinions related to the transactions. Also meritless is the holders' contention that CEC's previous announcement regarding the termination of CEC's guarantee of the holders' notes constitutes a default. As that announcement indicated, pursuant to the terms of the indentures to which these creditors agreed, the CEC guarantee terminated when CEOC ceased to be a wholly owned subsidiary of CEC. The guarantee was included in the indentures at CEC's request to allow the use of consolidated financial statements, not to provide credit support. CEC and CEOC have honored and will continue to honor their obligations under their indentures and expect creditors to do the same.