MGM Growth Properties launches $2.75 billion credit facility

By Sara Rosenberg

New York, April 1 – MGM Growth Properties Operating Partnership LP launched at its bank meeting on Friday a $2.75 billion senior secured credit facility, according to a market source.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Barclays, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the lead banks on the deal.

The credit facility consists of a $600 million five-year revolver, a $300 million five-year term loan A and a $1.85 billion seven-year covenant-light term loan B.

Price talk on the term loan B is Libor plus 400 basis points to 425 bps with a 0.75% Libor floor and an original issue discount of 99, the source said.

The term loan B has 101 soft call protection for six months.

Pricing on the revolver and term loan A is expected at Libor plus 275 bps, according to an 8-K filed with the Securities and Exchange Commission.

Commitments are due at noon ET on April 8, the source added.

Proceeds will be used to help repay about $4 billion of debt that the Operating Partnership is expected to assume from MGM Resorts International and some of its subsidiaries, to help pay around $150 million of fees and expenses associated with the financings and related transactions, and for general corporate purposes.

At closing, $150 million is expected to be drawn under the revolver.

Other funds for the transaction are expected to come from $1.05 billion of senior unsecured notes and $800 million of equity proceeds.

MGM Growth Properties is Las Vegas-based real estate investment trust that is being spun off from MGM Resorts, a Las Vegas-based operator of resorts and casinos.

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