Standard and Poor's Corp said it iskeeping 230 mln dlrs of debt of Caesars World Inc and Caesars
World Finance Corp on creditwatch with negative implications.
    S and P cited Caesars World's proposed recapitalization
plan that calls for incurring one billion dlrs of bank and
other debt to finance a 25 dlr per share special dividend and
the repayment of about 222.5 mln dlrs of existing debt.
    It said the plan's terms would violate dividend convenants
in the rated debt's indentures and likely force refinancing of
those issues. Caesars was placed on creditwatch for a possible
downgrade March nine following investor Martin Sosnoff's bid.
    Sosnoff bid 28 dlrs per share, or 725.2 mln dlrs, for the
86.4 pct of Caesars World stock he does not already own,
Standard and Poor's noted.
    The rating agency said an increase in Sosnoff's offer is
possible. If successful, the stock bid would markedly raise
Caesars World's financial risk and lead to a large drop in net
income and cash flow, S and P said.
    Caesars World currently carries BB senior debt and B-plus
subordinated debt. The finance unit's subordinated debt, which
is guaranteed by the parent, is rated B-plus.
 Reuter
