VICI Properties Inc. 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed on April 20, 2022, by VICI Properties Inc. and VICI Properties L.P. The filing reports the entry into a material definitive underwriting agreement for a multi-tranche senior notes offering. The transaction is directly related to the Company's previously announced acquisition of MGM Growth Properties LLC.
Key Financial Metrics and Capital Structure
The Company agreed to issue and sell a total of $5.0 billion in aggregate principal amount of Senior Notes across five tranches:
- 2025 Notes: $500.0 million at 4.375% coupon (issued at 99.955% of par).
- 2028 Notes: $1.25 billion at 4.750% coupon (issued at 99.932% of par).
- 2030 Notes: $1.0 billion at 4.950% coupon (issued at 99.771% of par).
- 2032 Notes: $1.5 billion at 5.125% coupon (issued at 99.779% of par).
- 2052 Notes: $750.0 million at 5.625% coupon (issued at 99.379% of par).
Net Proceeds: Estimated at approximately $4,934.5 million after deducting underwriting discounts, a $10.0 million discretionary fee, and other offering expenses.
Existing Debt: As of April 15, 2022, $600.0 million was outstanding under VICI LP's revolving credit facility, drawn on February 18, 2022, to fund a portion of the purchase price for The Venetian Resort Las Vegas and Venetian Expo.
Material Changes and Use of Proceeds
The primary material change is the expansion of the Company's long-term debt profile to facilitate a major strategic transaction. The net proceeds from the offering are designated for two specific purposes:
- Funding the obligation to redeem a majority of the units of VICI Properties OP LLC to be received by MGM Resorts International or its subsidiaries upon the closing of the MGM Growth Properties LLC acquisition.
- Repaying amounts outstanding under VICI LP's revolving credit facility.
Outlook, Risks, and Unusual Items
Closing Date: The offering is expected to close on April 29, 2022, subject to customary closing conditions.
Underwriters: The transaction is underwritten by Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, and Wells Fargo Securities, LLC.
Related Party Transactions: Affiliates of certain underwriters are lenders under VICI LP's existing credit facilities and may receive pro rata portions of the net proceeds used to repay those facilities.
Legal Opinion: Hogan Lovells US LLP issued an opinion dated April 25, 2022, regarding the legality of the Notes.
Investor Verification Checklist
- Verify the final closing date of the offering (expected April 29, 2022) and confirm the actual net proceeds received.
- Confirm the successful redemption of VICI Properties OP LLC units from MGM Resorts International as intended.
- Review the full text of the Underwriting Agreement (Exhibit 1.1) for specific covenants and indemnification terms.
- Monitor the repayment status of the $600.0 million revolving credit facility draw.
- Assess the impact of the new debt service obligations on future cash flows and liquidity.