Gaming and Leisure Properties Announces Pricing of $800,000,000 of 5.625% Senior Notes Due 2034 and $400,000,000 of 6.250% Senior Notes Due 2054

Rhea-AI Summary

Gaming and Leisure Properties, Inc. (GLPI) has announced the pricing of a $1.2 billion public offering of senior notes through its operating partnership. The offering consists of two tranches:

1. $800 million of 5.625% senior notes due 2034, priced at 99.094% of par value
2. $400 million of 6.250% senior notes due 2054, priced at 99.183% of par value

The notes will be senior unsecured obligations guaranteed by GLPI. The company plans to use the net proceeds for working capital, general corporate purposes, funding announced transactions, property development, debt repayment, and capital expenditures. The offering is expected to close on August 6, 2024, subject to closing conditions.

Positive

• Successful pricing of a large $1.2 billion senior notes offering
• Diverse use of proceeds for various corporate purposes and growth initiatives
• Strong investor interest indicated by the substantial offering size

Negative

• Increase in long-term debt obligations
• Potential impact on interest expenses due to new notes issuance

Insights

Financial Analyst

Gaming and Leisure Properties' (GLPI) recent pricing of $1.2 billion in senior notes is a significant move that warrants attention. The offering, split into two tranches maturing in 2034 and 2054, demonstrates the company's long-term financial planning and ability to secure substantial capital.

The $800 million 2034 Notes, priced at 99.094% of par with a 5.625% coupon and the $400 million 2054 Notes, priced at 99.183% of par with a 6.250% coupon, reflect current market conditions and GLPI's credit standing. These rates, while higher than recent years due to the overall interest rate environment, are still relatively attractive for a company in the gaming REIT sector.

The intended use of proceeds for working capital, general corporate purposes and potential funding of announced transactions suggests GLPI is positioning itself for growth or strategic moves. This could include property acquisitions or developments, which are important for REITs to maintain and increase their revenue streams.

Investors should note the strong underwriting syndicate, including major financial institutions, which indicates broad market confidence in GLPI. However, the additional debt will impact the company's balance sheet and future interest expenses, which should be monitored in upcoming financial reports.

Overall, this offering strengthens GLPI's liquidity position but also increases its long-term obligations. The success of this capital raise will ultimately depend on how effectively management deploys these funds to generate returns that exceed the cost of this debt.

Real Estate Investment Trust (REIT) Specialist

GLPI's substantial $1.2 billion note offering is a strategic move that merits close examination in the context of the REIT sector. As a gaming-focused REIT, GLPI operates in a niche market with unique dynamics and this capital raise could significantly influence its competitive position.

The decision to issue long-dated notes (10 and 30 years) suggests confidence in the long-term viability of the gaming real estate market. This aligns with the typically long-term nature of REIT investments and lease agreements. The pricing of these notes, particularly the 6.250% coupon for the 2054 tranche, reflects both the current high-interest rate environment and the perceived risk associated with such an extended maturity in the gaming sector.

For GLPI, this offering provides substantial dry powder for potential acquisitions or developments. In the REIT world, growth often comes through property acquisitions and having this capital available could allow GLPI to act swiftly on opportunities in the gaming real estate market. However, it's important to note that the success of this strategy hinges on GLPI's ability to deploy this capital into assets that yield returns higher than the interest rates on these notes.

Investors should also consider how this debt issuance might impact GLPI's payout ratio and dividend stability. REITs are required to distribute a high percentage of their taxable income and increased interest expenses could put pressure on available funds for distribution. However, if the capital is deployed effectively, it could lead to increased funds from operations (FFO) and potentially support dividend growth in the long term.

In conclusion, while this offering strengthens GLPI's war chest, it also increases financial leverage. The key for investors will be to monitor how efficiently GLPI utilizes this capital to drive growth and maintain its competitive edge in the specialized gaming REIT market.

WYOMISSING, Pa,, July 30, 2024 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (“GLPI”) (NASDAQ: GLPI) today announced the pricing of a public offering of $1,200,000,000 aggregate principal amount of Notes (as defined below), to be issued by its operating partnership, GLP Capital, L.P. (the “Operating Partnership”), and GLP Financing II, Inc., a wholly-owned subsidiary of the Operating Partnership (together with the Operating Partnership, the “Issuers”). The Notes will be issued in two tranches, the first of which will be senior notes due 2034 (the “2034 Notes”) and the second of which will be senior notes due 2054 (the “2054 Notes” and, together with the 2034 Notes, the “Notes”).The 2034 Notes priced at 99.094% of par value, with a coupon of 5.625% and will mature on September 15, 2034. The 2054 Notes priced at 99.183% of par value, with a coupon of 6.250% and will mature on September 15, 2054. The Notes will be senior unsecured obligations of the Issuers, guaranteed by GLPI.

The Issuers intend to use the net proceeds from the offering for working capital and general corporate purposes, which may include the funding of announced transactions, development and improvement of properties, repayment of indebtedness, capital expenditures and other general business purposes.

The offering is expected to close on August 6, 2024, subject to the satisfaction of certain closing conditions.

The offering will be made under an effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”) and only by means of a prospectus and prospectus supplement. The preliminary prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC and are available by visiting the EDGAR database on the SEC’s website at www.sec.gov.

Wells Fargo Securities, LLC, Citizens JMP Securities, LLC, Fifth Third Securities, Inc., Truist Securities, Inc., M&T Securities, Inc., Mizuho Securities USA LLC, SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc., KeyBanc Capital Markets Inc., RBC Capital Markets, LLC, Barclays Capital Inc., Scotia Capital (USA) Inc., BofA Securities, Inc., J.P. Morgan Securities LLC, Capital One Securities, Inc., Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. are serving as joint book-running managers, and Centerview Partners LLC and CBRE Capital Advisors, Inc. are serving as co-managers for the offering. A copy of the preliminary prospectus supplement, final prospectus supplement (when available) and the accompanying prospectus relating to the offering of the Notes may be obtained by contacting Wells Fargo Securities, LLC by calling 1-800-645-3751, Citizens JMP Securities, LLC by calling 1-617-725-5500, Fifth Third Securities, Inc. by calling 1-866-531-5353 or Truist Securities, Inc. by calling 1-800-685-4786.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer or sale will be made only by means of the prospectus supplement and prospectus forming part of the effective registration statement relating to these securities.

About Gaming and Leisure Properties

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our expectations regarding our ability to complete the offering and apply the net proceeds as indicated. Forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward looking statements are inherently subject to risks, uncertainties and assumptions about GLPI and its subsidiaries, including risks related to the following: (i) GLPI’s ability to successfully consummate the offering and apply the net proceeds as indicated; (ii) GLPI’s ability to successfully consummate pending transactions, including the ability of the parties to satisfy the various conditions to funding, receipt of required approvals and consents, or other delays or impediments to completing such pending transactions; (iii) GLPI's expectations regarding continued growth and dividend increases; (iv) the potential negative impact of ongoing high levels of inflation (which have been exacerbated by the armed conflict between Russia and Ukraine and may be further impacted by events in the Middle East) on discretionary consumer spending, including the casino operations of GLPI’s tenants; (v) the effect of pandemics, such as COVID-19, on GLPI as a result of the impact such pandemics may have on the business operations of GLPI’s tenants and their continued ability to pay rent in a timely manner or at all; (vi) the availability of, and the ability to identify, suitable and attractive acquisition and development opportunities and to acquire and lease those properties on favorable terms; (vii) GLPI’s ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate its properties, or other delays or impediments to completing acquisitions or projects; (viii) GLPI’s ability to maintain its status as a REIT; (ix) GLPI’s ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to us or at all, including for acquisitions or refinancings due to maturities; (x) the impact of our substantial indebtedness on our future operations and our ability to generate sufficient cash flows to service our outstanding indebtedness; (xi) adverse changes in our credit rating; (xii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and (xiii) other factors described in GLPI’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the SEC. All subsequent written and oral forward-looking statements attributable to GLPI or persons acting on GLPI’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. GLPI undertakes no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur as presented or at all.

Contact:

Gaming and Leisure Properties, Inc. Matthew Demchyk, Chief Investment Officer 610/401-2900 investorinquiries@glpropinc.com

Investor Relations Joseph Jaffoni, Richard Land, James Leahy at JCIR 212/835-8500 glpi@jcir.com

FAQ

What is the total value of the senior notes offering by Gaming and Leisure Properties (GLPI)?

Gaming and Leisure Properties (GLPI) has priced a public offering of $1.2 billion in aggregate principal amount of senior notes.

What are the terms of the 2034 Notes issued by GLPI?

The 2034 Notes, totaling $800 million, are priced at 99.094% of par value with a coupon of 5.625% and will mature on September 15, 2034.

What are the terms of the 2054 Notes issued by GLPI?

The 2054 Notes, totaling $400 million, are priced at 99.183% of par value with a coupon of 6.250% and will mature on September 15, 2054.

When is the expected closing date for GLPI's senior notes offering?

The offering is expected to close on August 6, 2024, subject to the satisfaction of certain closing conditions.

How does GLPI plan to use the proceeds from the senior notes offering?

GLPI intends to use the net proceeds for working capital, general corporate purposes, funding announced transactions, property development, debt repayment, capital expenditures, and other general business purposes.