By Richard Cowan and Jessica DiNapoli
(Reuters) - Some casino and hotel companies including Caesars Entertainment Corp (O:CZR) and Hilton Worldwide Holdings Inc (N:HLT) are expected to get a reprieve from a proposal to curb real estate investment trusts, or REITs.
An earlier version of the $650 billion tax break bill detailed Wednesday included provisions that would have potentially derailed major company deals that involve REITs, which have gained popularity among investors thanks to more favorable tax treatment.
In the latest version, companies are exempt if by Dec. 7 they had requested that the Internal Revenue Service interpret and apply tax laws to their transactions, according to Senate Democratic leader Harry Reid's office, which backed the changes.
The changes protect the operating unit of Caesars, which has filed for bankruptcy. The company's restructuring plans, which have support of most senior lenders and bondholders, call for splitting it up into an operating company and a REIT.
Hilton also plans to spin off its hotel properties into a REIT.
Spokesmen for Caesars and Hilton declined to comment.
Caesars is headquartered in Reid's home state of Nevada, and Hilton has properties in the state as well.
The Republican-controlled House will vote on the tax break bill Thursday.
A broad change to the Trust Indenture Act, a Depression-era rule that protects bondholders from out-of-court restructuring deals, did not make it into the proposed $1.15 trillion spending bill, expected to be voted on by the House on Friday.
Private equity groups such as Caesars' owners Apollo Global Management and TPG Capital had supported the changes, which could have thwarted some bondholders' legal action against Caesars for stripping guarantees on its casino unit's debt before it filed for bankruptcy.