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VICI Promoting $5B In Notes To Full MGM Development Purchase

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Posted on: April 20, 2022, 04:58h. 

Final up to date on: April 20, 2022, 04:58h.

VICI Properties (NYSE:VICI) introduced at the moment it’s promoting $5 billion value of senior unsecured notes with the majority of these proceeds going to a notes change with MGM Development Properties (NYSE:MGP), which the previous is within the means of buying.

VICI notes
Excalibur on the Las Vegas Strip. Quickly-t0-be-owner VICI is promoting $5 billion in notes. (Picture: YouTube)

The Caesars Palace proprietor is promoting $1.5 billion value of 5.125% senior unsecured notes due 2032, $1 billion in 4.950% senior unsecured lengthy notes due 2030, $1.25 billion mixture principal quantity of 4.750% senior unsecured lengthy notes due 2028, $750.0 million mixture principal quantity of 5.625% senior unsecured notes due 2052 and $500 million in 4.375% senior unsecured notes due 2025.

The issuer intends to make use of the web proceeds from the providing to fund the roughly $4.4 billion consideration for the redemption of a majority of the VICI Properties OP LLC items to be obtained by MGM Resorts Worldwide in reference to the closing of the MGP acquisition,” in response to an announcement issued by the on line casino landlord.

The gaming actual property funding belief (REIT) provides that the remaining $600 million will likely be directed to repaying “considerably all” of that quantity that it drew down on a revolving credit score facility to fund its buy of the property belongings of the Venetian, Palazzo and Venetian Expo. That transaction was accomplished earlier this yr.

Subsequent Step in MGP Marriage

Final August, VICI introduced the $17.2 billion all-stock acquisition of MGP. That deal will create the biggest on line casino landlord on the Las Vegas Strip.

Final week, the suitor mentioned it’s extending a deadline for MGP buyers to change notes in that firm for related securities in VICI. The deadline was moved to April 28 from April 14. The $5 billion notes sale introduced at the moment is scheduled to shut on April 29.

“Curiosity on the 2025 Notes, the 2032 Notes and the 2052 Notes is payable in money in arrears on Might 15 and November 15 of every yr, starting on November 15, 2022. Curiosity on the 2028 Notes and the 2030 Notes is payable in money in arrears on February 15 and August 15 of every yr, starting on August 15, 2022,” provides VICI.

The REIT additionally mentioned any capital remaining following the notes change and reimbursement of the credit score revolver will likely be used for normal company functions, doubtlessly together with acquisitions.

VICI Credit score Profile

Owing to the truth that the notes sale was introduced simply hours in the past, credit score scores companies haven’t but chimed in on the transaction. On Monday, Fitch Scores lifted its grade on VICI to “BBB-“ from “BB” with a “constructive” outlook.

“Fitch expects VICI will cut back internet leverage to five.5x inside 24 months of the transaction closing from an estimated professional forma 5.7x at closing,” mentioned the analysis agency. “Fitch views the merger to be strategically sound in that it alleviates some concerns that have been beforehand restraining the 2 firms’ standalone credit score profiles resembling tenant and asset diversification.”

By the use of the MGP buy, VICI is including 15 gaming properties to its portfolio and almost $1.01 billion in annual lease.

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