Published on 8/9/2016 in the Prospect News High Yield Daily.
New Issue: MGM Growth sells upsized $500 million 4½% 10-year bullet notes at par
By Paul A. Harris
Portland, Ore., Aug. 9 – MGM Growth Properties LLC priced an upsized $500 million issue of non-callable 10-year senior notes (B2/BB-) at par to yield 4½% on Tuesday, according to market sources.
The yield printed at the tight end of yield talk in the 4 5/8% area. Initial guidance had the deal coming with a yield in the high 4% context.
BofA Merrill Lynch was the left bookrunner. Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Fifth Third Bank, Morgan Stanley & Co. LLC and SMBC Nikko were joint bookrunners.
The Las Vegas-based real estate investment trust plans to use the proceeds to refinance amounts under the revolver drawn in connection with the acquisition of Borgata Hotel Casino and Spa from MGM Resorts International, completed on Aug. 1, 2016, with any remaining proceeds for general corporate purposes.
| Issuers: | MGM Growth Properties Operating Partnership LP and MGP Finance Co-Issuer, Inc.
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| Amount: | $500 million, increased from $400 million
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| Maturity: | Sept. 1, 2026
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| Securities: | Senior notes
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| Left bookrunner: | BofA Merrill Lynch
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| Joint bookrunners: | Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Fifth Third Bank, Morgan Stanley & Co. LLC, SMBC Nikko
|
| Co-managers: | Credit Agricole CIB, SunTrust Robinson Humphrey Inc., Scotia Capital, Citizens
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| Coupon: | 4½%
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| Price: | Par
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| Yield: | 4½%
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| Spread: | 296 bps
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| Call protection: | Make-whole call at Treasuries plus 50 bps until three months prior to maturity, then callable at par, otherwise non-callable
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| Trade date: | Aug. 9
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| Settlement date: | Aug. 12
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| Ratings: | Moody's: B2
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| S&P: BB-
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| Distribution: | Rule 144A and Regulation S
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| Price talk: | 4 5/8% area
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| Marketing: | Quick to market
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