Madison Square Garden unit gets $275 million term loan

By Wendy Van Sickle

Columbus, Ohio, Dec. 22 – Madison Square Garden Entertainment Corp. indirect, wholly owned subsidiary MSG Las Vegas, LLC entered into a credit agreement with JP Morgan Chase Bank, NA as lead arranger and administrative agent on Thursday providing for a $275 million five-year senior secured term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The facility will mature on Dec. 22, 2027. The principal obligations are due at the maturity of the facility, with no amortization payments prior to maturity.

Borrowings bear interest at term SOFR+ 10 basis points CSA plus a margin of 437.5 bps.

All obligations under the facility are guaranteed by MSG Entertainment Group, LLC.

Madison Square Garden Entertainment is pursuing its plans for MSG Sphere – venues that will combine technology with multi-sensory storytelling to deliver immersive experiences.

The first MSG Sphere is under construction in Las Vegas and is on track to open during the second half of calendar year 2023. The facility will enable Madison Square Garden Entertainment to further fund the development of content, including original attractions.

The facility includes financial covenants requiring MSG Las Vegas to maintain a specified minimum debt service coverage ratio and requiring MSG Entertainment Group to maintain a specified minimum liquidity level. The debt service coverage ratio covenant begins testing in the fiscal quarter ending Dec. 31, 2023 on a historical basis and, beginning with the first fiscal quarter occurring after the date on which the first ticketed performance or event open to the general public occurs at the Las Vegas Sphere, is also tested on a prospective basis. Both the historical and prospective debt service coverage ratios are set at 1.35:1.

In addition, among other conditions, MSG Las Vegas is not permitted to make distributions to MSG Entertainment Group unless the historical and prospective debt service coverage ratios are at least 1.50:1. The minimum liquidity level for MSG Entertainment Group is set at $100 million, tested on the closing date and as of the last day of each fiscal quarter thereafter.

New York-based Madison Square Garden builds sports, media and entertainment brands.

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