Closes Senior Notes and Credit Facility
Financings
Penn National Gaming, Inc. (PENN:Nasdaq) (“Penn”), announced the
completion of the previously announced, tax-free spin-off to its
shareholders of Gaming and Leisure Properties, Inc. (“GLPI”),
effective at 12:01 a.m. New York City time today. As a result, GLPI
is now a separate company which owns the real estate associated
with 21 casino facilities, including two facilities currently under
development in Dayton and Youngstown, Ohio and leases, or expects
to lease with respect to Dayton and Youngstown, 19 of these
facilities to Penn. The remaining two gaming facilities, located in
Baton Rouge, Louisiana and Perryville, Maryland, are owned and
operated by subsidiaries of GLPI.
Since October 14, 2013, in addition to trading on the “regular
way” Nasdaq market with the entitlement to receive shares of GLPI
common stock distributed in the spin-off, Penn common shares have
traded on an “ex-distribution” market under the symbol “PENNV”
without the entitlement to receive GLPI shares distributed in the
spin-off. From and after November 4, 2013, all trading in Penn
shares will occur under the symbol “PENN” without any entitlement
to receive shares of GLPI.
In connection with the spin-off, Penn refinanced its existing
senior secured credit facilities and repurchased or called for
redemption, and discharged the indenture governing, its 8.75%
Senior Subordinated Notes due 2019 (collectively, the
“Refinancing”). Penn also completed the previously announced
issuance, in a private placement, of $300 million principal amount
of new 5.875% Senior Notes due 2021 issued at par. Penn also closed
on new senior secured credit facilities comprised of a $500 million
revolving credit facility with a maturity of five years, a $500
million term loan A facility with a maturity of five years and a
$250 million term loan B facility with a maturity of seven years.
The proceeds of the initial funding under the new credit
facilities, the new notes and the cash proceeds Penn received from
GLPI in actual or constructive exchange for the contribution of
real property assets by Penn and its subsidiaries to GLPI were used
to consummate the Refinancing, to pay related fees and expenses and
for working capital purposes. The interest rates applicable to
loans under the credit facilities are , at Penn’s option, equal to
either a LIBOR rate or a base rate plus an applicable margin. The
applicable margin for the revolving credit facility and the term
loan A is 2.00% for LIBOR loans and 1.00% for base rate loans until
Penn provides financial reports for the first full fiscal quarter
following closing and, thereafter, will range from 1.25% to 2.75%
per annum for LIBOR loans and 0.25% to 1.75% per annum for base
rate loans, in each case depending on Penn’s total net leverage
ratio. The revolving credit facility and the term loan A were
issued without upfront fees or original issue discount. Unused
commitments under the revolving credit facility are subject to a
commitment fee of 0.35% until Penn provides financial reports for
the first full fiscal quarter following closing and, thereafter,
0.25% to 0.50%, depending on Penn’s total net leverage ratio. The
applicable margin for the term loan B is 2.50% for LIBOR loans and
1.50% for base rate loans. The term loan B is also subject to an
interest rate floor of 0.75% for LIBOR loans and 1.75% for base
rate loans and was issued with an upfront fee of 0.50%.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in gaming and racing facilities with a focus on slot machine
entertainment. The Company presently operates twenty-six facilities
in seventeen jurisdictions, including Florida, Illinois, Indiana,
Iowa, Kansas, Maine, Maryland, Mississippi, Missouri, Nevada, New
Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and
Ontario. In aggregate, Penn National’s operated facilities feature
approximately 31,000 gaming machines, 800 table games, 2,900 hotel
rooms and 8.8 million of property square footage.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements
can be identified by the use of forward looking terminology such as
“expects,” “believes,” “estimates,” “expects,” “intends,” “may,”
“will,” “should” or “anticipates” or the negative or other
variation of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Such forward looking
statements are inherently subject to risks, uncertainties and
assumptions about Penn and its subsidiaries, and accordingly, any
forward looking statements are qualified in their entirety by
reference to the factors described in Penn’s Annual Report on Form
10-K for the year ended December 31, 2012, subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K as filed with
the Securities and Exchange Commission (the “SEC”). Important
factors that could cause actual results to differ materially from
the forward looking statements include, without limitation, risks
related to the following: Penn’s ability to obtain timely
regulatory approvals required to operate and manage Penn’s
facilities, or other delays or impediments to implementing Penn’s
business plan, including favorable resolution of any related
litigation; Penn’s ability to secure state and local permits and
approvals necessary for construction; construction factors,
including delays, unexpected remediation costs, local opposition
and increased cost of labor and materials; Penn’s ability to reach
agreements with the thoroughbred and harness horseman in Ohio in
connection with the proposed relocations and to otherwise maintain
agreements with Penn’s horseman, pari-mutuel clerks and other
organized labor groups; the passage of state, federal or local
legislation (including referenda) that would expand, restrict,
further tax, prevent or negatively impact operations in or adjacent
to the jurisdictions in which Penn does or seeks to do business
(such as a smoking ban at any of Penn’s facilities); the effects of
local and national economic, credit, capital market, housing, and
energy conditions on the economy in general and on the gaming and
lodging industries in particular; the activities of Penn’s
competitors and the rapid emergence of new competitors
(traditional, internet and sweepstakes based); financial,
operational, regulatory or other potential challenges of the GLPI
subsidiary from whom Penn will lease substantially all of its
gaming and racing facilities, and from whom Penn expects to lease
the facilities currently under development in Dayton and
Youngstown, Ohio, the costs and risks involved in the pursuit of
such development opportunities and Penn’s ability to complete the
development of, and achieve the expected returns from, such
opportunities; the impact of weather; and other factors discussed
in Penn’s filings with the SEC. All subsequent written and oral
forward looking statements attributable to Penn or persons acting
on Penn’s behalf are expressly qualified in their entirety by the
cautionary statements included in this press release. Penn
undertakes no obligation to publicly update or revise any forward
looking statements contained or incorporated by reference herein,
whether as a result of new information, future events or otherwise,
except as required by law. In light of these risks, uncertainties
and assumptions, the forward looking events discussed in this press
release may not occur.
Penn National Gaming, Inc.Desiree Burke, 610-373-2400Chief
Accounting Officer,Vice President and Corporate
ControllerorJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
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