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Item 1.01.
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Entry into A Material Definitive Agreement.
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On July 1, 2021, Penn National Gaming, Inc. (the “Company”)
closed its previously announced private offering (the “Offering”) of $400 million aggregate principal amount of 4.125% senior
notes due 2029 (the “Notes”). The Notes were issued at par. The Company intends to use the proceeds of the Offering for general
corporate purposes.
The Notes were issued pursuant to an indenture, dated as of July 1,
2021 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”).
At any time prior to July 1, 2024, the Company may redeem the Notes
for cash at its option, in whole or in part, at any time or from time to time, at a redemption price equal to the principal amount thereof
plus a “make-whole premium”, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On and
after July 1, 2024, the Company may redeem the Notes for cash at its option, in whole or in part, at any time or from time to time, at
the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, on the notes redeemed, to, but not including,
the applicable redemption date. In addition, at any time prior to July 1, 2024, the Company may redeem the Notes for cash at its option,
in whole or in part, at any time or from time to time, at a redemption price of 104.125% of the principal amount, plus accrued and unpaid
interest, if any, to, but not including, the redemption date, with an amount of cash equal to the net cash proceeds of one or more Equity
Offerings (as defined in the Indenture) so long as (i) at least 60% of the aggregate principal amount of notes originally issued under
the Indenture remains outstanding after the occurrence of such redemption and (ii) such redemption occurs within 180 days after the date
of such Equity Offering. If a Change of Control Triggering Event (as defined in the Indenture) occurs, each holder of Notes will have
the right to require the Company to repurchase all or any part of that holder’s Notes pursuant to an offer by the Company on the
terms set forth in the Indenture at a purchase price equal to 101% of the aggregate principal amount of notes repurchased plus accrued
and unpaid interest, if any, on the notes repurchased, to, but not including, the date of purchase. The Notes also will be subject to
mandatory redemption requirements imposed by gaming laws and regulations.
The Notes are the Company’s unsubordinated, unsecured obligations
and are equal in right of payment with all unsubordinated indebtedness of the Company, without giving effect to collateral arrangements,
and senior in right of payment to all subordinated indebtedness of the Company. The Notes are effectively subordinated in right of payment
to all secured indebtedness of the Company, including indebtedness under the Company’s existing credit agreement, to the extent
of the value of the assets securing such indebtedness. The Notes are not guaranteed by any of the Company’s subsidiaries and are
structurally subordinated to all liabilities of any subsidiaries of the Company.
The Indenture contains covenants limiting the Company’s and its
restricted subsidiaries’ ability to: incur additional debt and issue certain preferred stock; pay dividends or distributions on
its capital stock or repurchase its capital stock or subordinated debt; make certain investments; create liens on its assets to secure
certain debt; enter into transactions with affiliates; merge or consolidate with another company; transfer and sell assets; designate
its subsidiaries as unrestricted subsidiaries; and make certain amendments to the Master Lease, dated November 1, 2013, as amended from
time to time (the “Master Lease”), between Penn Tenant, LLC, which is a subsidiary of the Company, and GLP Capital, L.P.,
which is a subsidiary of Gaming and Leisure Properties, Inc. These covenants are subject to a number of important and significant limitations,
qualifications and exceptions. In addition, most of these covenants will cease to apply to the Notes at such time as the Notes have investment
grade ratings from both Moody’s Investors Service, Inc. and Standard & Poor’s Rating Services.
The Indenture contains certain customary events of default (subject
in certain cases to customary grace and cure periods).
The foregoing description is not complete and is qualified in its entirety
by the Indenture, which is filed herewith as Exhibit 4.1 and incorporated herein by reference.