MGM Growth Properties Operating Partnership LP Announces Closing Of Upsized $750 Million Senior Notes Offering

Rhea-AI Summary

MGM Growth Properties has successfully issued $750 million in senior notes at a 3.875% interest rate, increasing its initial offering by $250 million. This strategic move enhances the company’s balance sheet by securing long-term fixed-rate debt at the lowest coupon rate in its history. The proceeds will primarily support general corporate purposes, including potential redemption of $700 million in partnership units held by MGM Resorts. The issuance reflects strong investor confidence despite current market challenges.

Positive

• Successfully raised $750 million in senior notes, an increase of $250 million from the initial offering.
• Achieved the lowest coupon rate in company history at 3.875%.
• Proceeds will be used for general corporate purposes, potentially strengthening the company's financial position.

Negative

• None.

LAS VEGAS, Nov. 19, 2020 /PRNewswire/ -- MGM Growth Properties Operating Partnership LP (the "Operating Partnership") and MGP Finance Co-Issuer, Inc. (together with the Operating Partnership, the "Issuers"), consolidated subsidiaries of MGM Growth Properties LLC (NYSE: MGP) (the "Company"), have completed the issuance of $750 million in aggregate principal amount of 3.875% senior notes due 2029 (the "notes") at par.  The $750 million aggregate principal amount of the notes represented an increase of $250 million from the originally announced offering size of $500 million.   

"We are pleased with the execution of this opportunistic upsized capital raise, which allowed us to better position our balance sheet with long-term fixed rate debt at the lowest coupon the Company has achieved in its history," said James Stewart, Chief Executive Officer of MGM Growth Properties. "We believe the success of this transaction is a testament to the continued confidence investors have in the attractiveness of our business model during these challenging times."

The Issuers plan to use the net proceeds of the offering for general corporate purposes, which may include the redemption of up to $700 million of the Operating Partnership units held by MGM Resorts International ("MGM") should MGM elect to exercise certain rights it holds to cause the redemption of such units for cash.

The notes offered have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States or to any U.S. persons absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes have been offered only to "qualified institutional buyers" under Rule 144A of the Securities Act or, outside the United States, to persons other than "U.S. persons" in compliance with Regulation S under the Securities Act.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the notes, nor shall there be any offer, solicitation or sale of any notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. 

Statements in this release that are not historical facts are "forward-looking" statements and "safe harbor statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including those described in the Company's public filings with the Securities and Exchange Commission. Forward-looking statements are based on management's current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, the expected use of proceeds and the Company's expectations regarding the continued impact of the COVID-19 pandemic on its business and the business of its tenant, the Company's ability to continue to grow its dividend, successfully execute on its business strategy and acquire additional properties in accretive transactions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Therefore, we caution you against relying on any of these forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include risks related to the Company's ability to receive, or delays in obtaining, any regulatory approvals required to own its properties, or other delays or impediments to completing the Company's planned acquisitions or projects, including any acquisitions of properties from MGM; the ultimate timing and outcome of any planned acquisitions or projects; the Company's ability to maintain its status as a REIT; the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the Company's ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to the Company; 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 other factors described in the Company's periodic reports filed with the Securities and Exchange Commission. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

 

 

 

 

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SOURCE MGM Growth Properties

FAQ

What is the significance of MGM Growth Properties' recent senior notes issuance on Nov 19, 2020?

MGM Growth Properties raised $750 million in senior notes, enhancing its financial stability with a low 3.875% interest rate.

How will MGM Growth Properties use the proceeds from the senior notes offering?

The proceeds will support general corporate purposes, including possible redemption of $700 million in partnership units held by MGM Resorts.

What was the initial offering size for MGM Growth Properties' senior notes before the upsizing?

The initial offering size was $500 million, which was increased by $250 million.

What does the upsizing of MGM Growth Properties' senior notes indicate about investor confidence?

The upsizing reflects strong investor confidence in MGM Growth Properties' business model during challenging market conditions.