Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of
Registrant
Closing of Notes Offering
On
May 21, 2018, Gaming and Leisure Properties, Inc. (GLPI), closed its previously announced debt financings, consisting of (i) an offering (the Notes Offering) of $1,000.0 million aggregate principal amount of
two series of new senior unsecured notes issued by GLPIs wholly owned subsidiaries GLP Capital, L.P. (the Operating Partnership) and GLP Financing II, Inc. (Capital Corp. and, together with the Operating Partnership,
the Issuers): $500.0 million of 5.250% Senior Notes due 2025 (the 2025 Notes) and $500.0 million of 5.750% Senior Notes due 2028 (the 2028 Notes and together with the 2025 Notes, the Notes)
and (ii) a $1,100.0 million revolving credit facility with a maturity of five years (the New Revolver), entered into pursuant to Amendment No. 2, dated May 21, 2018 ( Amendment No. 2), to the
Operating Partnerships existing Credit Agreement, dated as of October 28, 2013, among the Operating Partnership, the several banks and other financial institutions or entities party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent (the Existing Credit Agreement and, as amended to date, the Amended Credit Agreement).
Indenture for the
Notes
The Issuers issued the Notes on May 21, 2018 pursuant to an Indenture, dated as of October 30, 2013 (the Base Indenture),
as supplemented by a First Supplemental Indenture, dated March 28, 2016 (the First Supplemental Indenture) and, with respect to the 2025 Notes, the Fifth Supplemental Indenture, dated May 21, 2018 (the Fifth Supplemental
Indenture), and, with respect to the 2028 Notes, the Sixth Supplemental Indenture, dated May 21, 2018 (the Sixth Supplemental Indenture and, together with the Base Indenture, the First Supplemental Indenture and the Fifth
Supplemental Indenture, the Indenture), among the Issuers, GLPI, as parent guarantor, and Wells Fargo Bank, National Association (the Trustee). The 2025 Notes mature on June 1, 2025 and bear interest at a rate of 5.250%
per year. The 2028 Notes mature on June 1, 2028 and bear interest at a rate of 5.750% per year. Interest on the Notes is payable on June 1 and December 1 of each year, beginning on December 1, 2018.
The Issuers may redeem the Notes of any series at any time, and from time to time, at a redemption price of 100% of the principal amount of the Notes
redeemed, plus a make-whole redemption premium described in the Indenture, together with accrued and unpaid interest to, but not including, the redemption date, except that if Notes of a series are redeemed 90 or fewer days prior to
their maturity, the redemption price will be 100% of the principal amount of the Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date. If GLPI experiences a change of control accompanied by a decline
in the credit rating of the Notes of a particular series, the Issuers will be required to give holders of the Notes of such series the opportunity to sell the Issuers their Notes of such series at a price equal to 101% of the principal amount of the
Notes of such series, together with accrued and unpaid interest to, but not including, the repurchase date. The Notes also are subject to mandatory redemption requirements imposed by gaming laws and regulations.
The Notes are guaranteed on a senior unsecured basis by GLPI. The Notes are the Issuers senior unsecured obligations and rank pari passu in right of
payment with all of the Issuers senior indebtedness, and senior in right of payment to all of the Issuers subordinated indebtedness, without giving effect to collateral arrangements. The Notes are effectively subordinated to the
Issuers future secured indebtedness, if any, to the extent of the value of the assets securing such indebtedness. The Notes will not be guaranteed by any of the Operating Partnerships subsidiaries, except in the event that the Operating
Partnership in the future issues certain subsidiary-guaranteed debt securities, and, therefore, unless and until such time, the Notes are structurally subordinated to all liabilities of any of the Operating Partnerships subsidiaries (excluding
Capital Corp.).
The Indenture contains covenants limiting the Issuers ability to: incur additional debt and use their assets to secure debt; merge
or consolidate with another company; and make certain amendments to the master lease, dated November 1, 2013, under which the Operating Partnership leases to Penn Tenant, LLC most of the assets that were acquired from Penn National Gaming, Inc.
in 2013 (the Penn Master Lease). The Indenture also requires the Issuers to maintain a specified ratio of unencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations,
qualifications and exceptions.
Events of default under the Indenture include, among others, the following with respect to a series of Notes:
default for 30 days in the payment when due of interest on the Notes of such series; default in payment when due of the principal of, or premium, if any, on the Notes of such series; failure to comply with certain covenants in the Indenture with
respect to such series for 60 days after 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 in excess of a specified amount;
certain events of bankruptcy or insolvency; and the Penn Master Lease or the guaranty related thereto terminating 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 (or the Notes of such series, as applicable) to be due and payable immediately.
The net proceeds from the Notes Offering
were approximately $988.9 million. The Issuers used approximately $495.0 million of the net proceeds from the Notes Offering (i) to prepay and extinguish outstanding borrowings under the term loan A facility under the Existing Credit
Agreement (the Term Loan A Facility), including accrued and unpaid interest thereon and to repay a portion of the outstanding borrowings under the term loan
A-1
facility under the Existing Credit
Agreement (the Term Loan
A-1
Facility) and (ii) to pay fees and expenses incurred in connection with amending the Existing Credit Agreement. In connection with the Issuers cash tender
offer (the Tender Offer), launched on May 7, 2018, to purchase any and all of the $550 million aggregate principal amount of the Issuers outstanding 4.375% Senior Notes due November 1, 2018 (the 2018
Notes) and a related consent solicitation (the Consent Solicitation) in respect of certain terms of the 2018 Notes, the Issuers used approximately $396.1 million of the net proceeds from the Notes Offering to finance the
repurchase of the 2018 Notes tendered by holders as of 5:00 p.m., New York City time, on May 18, 2018 (the Consent Time), including the tender premium and accrued interest. If the holders of the approximately $156.5 million
aggregate principal amount of 2018 Notes that remained outstanding after the Consent Time (the Remaining Notes) tender such Remaining Notes prior to 11:59 p.m., New York City time, on June 4, 2018 (the Expiration Time),
the Issuers intend to use the remaining net proceeds from the Notes Offering and borrowings under the New Revolver to finance the repurchase of the Remaining Notes. To the extent that not all holders of the Remaining Notes participate in the Tender
Offer and there are any remaining net proceeds, the Issuers intend to use such remaining net proceeds for general corporate purposes or to pay down borrowings under the Amended Credit Agreement.
The foregoing description of the Indenture does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full text of
the Base Indenture, the First Supplemental Indenture, the Fifth Supplemental Indenture (including the form of 2025 Note attached thereto) and the Sixth Supplemental Indenture (including the form of 2028 Note attached thereto), which are filed
herewith as Exhibits 4.1, 4.2, 4.4 and 4.5, respectively, and incorporated herein by this reference.
Amendment No. 2 to Existing Credit Agreement
On May 21, 2018, the Operating Partnership entered into Amendment No. 2 to its Existing Credit Agreement, pursuant to which the Operating
Partnership replaced and upsized its revolver under the Existing Credit Agreement from $700.0 million of revolving commitments to an aggregate principal amount of up to $1,100.0 million of
R-1
revolving commitments. The Amended Credit Agreement also provides for
sub-facilities
for standby letters of credit in aggregate principal amount of up to $150.0 million and swingline loans in aggregate
principal amount of up to $50.0 million. In connection with its entry into the Amended Credit Agreement, the Operating Partnership also (i) repaid all outstanding borrowings under, and terminated, the Term Loan A Facility and
(ii) repaid a portion of the outstanding borrowings under the Term Loan
A-1
Facility. The Operating Partnership did not incur any early termination penalties in connection with the termination of the Term
Loan A Facility. The loans under the New Revolver mature on May 21, 2023, the fifth anniversary of the closing date of Amendment No. 2. The maturity date of the Term Loan
A-1
Facility, April 28,
2021, remains unchanged. Certain of the underwriters that participated in the Notes Offering or their affiliates are lenders under our Existing Credit Agreement and, accordingly, received or will receive a pro rata portion of the borrowings repaid
thereunder.
The foregoing description of Amendment No. 2 does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the full text of Amendment No. 2, which is filed herewith as Exhibit 10.1 and incorporated herein by this reference. The Existing Credit Agreement is more fully described in GLPIs Current Reports
on Form
8-K
filed with the U.S. Securities and Exchange Commission (the SEC) on November 1, 2013 and March 28, 2016, which descriptions are incorporated herein by reference. The
descriptions of the Existing Credit Agreement incorporated by reference are not complete and are subject to and entirely qualified by reference to the full text of the Existing Credit Agreement.
Fourth Supplemental Indenture
On May 21, 2018, the
Issuers entered into a Fourth Supplemental Indenture among the Issuers, GLPI and the Trustee, in connection with the Issuers previously announced Tender Offer and Consent Solicitation with respect to the 2018 Notes, which commenced on
May 7, 2018. The Fourth Supplemental Indenture amends the terms of the Base Indenture and the First Supplemental Indenture solely with respect to the 2018 Notes to, among other things, eliminate or modify a significant portion of the
restrictive covenants and certain events of default and eliminate or modify related provisions in the Indenture. The Issuers received and accepted a majority in principal amount of the 2018 Notes for payment on May 21, 2018. The amendments to
the Indenture with respect to the 2018 Notes became operative when the 2018 Notes that had been validly tendered on or prior to the Consent Time were accepted for payment and paid for by the Issuers pursuant to the terms of the Tender Offer on
May 21, 2018.
The foregoing description does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full
text of the Base Indenture, the First Supplemental Indenture and the Fourth Supplemental Indenture, which are filed herewith as Exhibits 4.1, 4.2 and 4.3, respectively, and incorporated herein by this reference.