| Item 1.01 |
Entry into a Material Definitive Agreement.
|
On November 19, 2020, MGM Growth Properties Operating
Partnership LP (the “Issuer”) and MGP Finance Co-Issuer, Inc. (the “Co-Issuer” and together with the
Issuer, the “Issuers”), indirect subsidiaries of MGM Resorts
International, a Delaware corporation (the “Company”), issued
$750 million in aggregate principal amount of 3.875% senior
notes due 2029 (the “notes”) under an indenture dated as of
November 19, 2020 (the “Indenture”), among the Issuers, the
subsidiary guarantors party thereto and U.S. Bank National
Association, as trustee. The notes were sold in the United States
only to accredited investors pursuant to an exemption from the
Securities Act of 1933, as amended (the “Securities Act”), and
subsequently resold to qualified institutional buyers pursuant to
Rule 144A under the Securities Act and to non-U.S. persons in accordance with
Regulation S under the Securities Act.
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 Issuer’s operating partnership units
held by the Company should the Company elect to exercise certain
rights it holds to cause the redemption of such units for each.
The notes will mature on February 15, 2029. The Issuers will
pay interest on the notes on February 15 and August 15 of
each year, commencing on August 15, 2021. Interest on the
notes will accrue at a rate of 3.875% per annum and be payable in
cash.
The notes will be fully and unconditionally guaranteed, jointly and
severally, by each of the Issuer’s existing and future direct and
indirect wholly owned material domestic subsidiaries that
guarantees the Issuer’s senior credit agreement or any other
material capital markets indebtedness, other than certain excluded
subsidiaries. The notes will also not be guaranteed by or be the
obligations of the Company, MGM Growth Properties LLC, MGM Growth
Properties OP GP LLC, the Company’s other subsidiaries or, unless
and until the Issuer obtains approval of the New York State Gaming
Commission, MGP Yonkers Realty Sub, LLC.
The Issuers may redeem all or part of the notes at a redemption
price equal to 100% of the principal amount of the notes plus, to
the extent the Issuers are redeeming notes prior to the date that
is three months prior to their maturity date, an applicable make
whole premium, plus, in each case, accrued and unpaid interest.
The Indenture contains customary covenants that will limit the
Issuers’ ability and, in certain instances, the ability of the
Issuers’ subsidiaries, to borrow money, create liens on assets,
make distributions and pay dividends on or redeem or repurchase
stock, make certain types of investments, sell stock in certain
subsidiaries, enter into agreements that restrict dividends or
other payments from subsidiaries, enter into transactions with
affiliates, issue guarantees of debt, and sell assets or merge with
other companies. These limitations are subject to a number of
important exceptions and qualifications set forth in the Indenture.
A copy of the Indenture is incorporated by reference hereto as
Exhibit 4.1.
Events of default under the Indenture include, among others, the
following with respect to the notes: default for 30 days in the
payment when due of interest on the notes; default in payment when
due of the principal of, or premium, if any, on the notes; failure
to comply with certain covenants in the Indenture for 60 days upon
the receipt of notice from the trustee or holders of 25% in
aggregate principal amount of the notes of such series;
acceleration or payment default of debt of the Issuers or a
significant subsidiary thereof in excess of a specified amount that
remains uncured for 30 days; certain events of bankruptcy or
insolvency; and the master lease or the guaranty related thereto
terminating or ceasing to be effective in certain circumstances. In
the case of an event of default arising from certain events of
bankruptcy or insolvency with respect to the Issuers, all notes
then outstanding will become due and payable immediately without
further action or notice. If any other event of default occurs with
respect to the notes, the trustee or holders of 25% in aggregate
principal amount of the notes may declare all the notes to be due
and payable immediately.
The description set forth above is qualified in its entirety by
reference to the full text of the Indenture incorporated by
reference hereto as Exhibit 4.1. This Current Report on Form
8-K does not constitute an
offer to sell or the solicitation of an offer to buy the notes.
