LAS VEGAS, Dec. 2, 2020 /PRNewswire/ -- MGM Resorts
International ("MGM Resorts") (NYSE: MGM) and MGM Growth Properties
LLC ("MGP") (NYSE: MGP) today announced that MGP has redeemed
approximately 23.5 million of MGM Resorts' operating partnership
units (the "Units") for $700 million,
which represents the remaining amount under the agreement with MGP
to purchase up to $1.4 billion of MGM
Resorts' Units for cash.
"Today's announcement reflects our continued focus on enhancing
our balance sheet to strengthen our financial flexibility," said
Bill Hornbuckle, CEO and President
of MGM Resorts. "As the pandemic continues to impact operations at
our properties across the U.S., we believe the opportunistic
exercise of our redemption right as well as our recent senior notes
offering allow us to continue pursuing our strategic goals while
navigating the crisis."
MGM Resorts intends to use the $700
million in proceeds for general corporate purposes. As of
September 30, 2020, excluding MGM
China and MGP, and after giving effect to the redemption and MGM
Resorts' recent bond offering, MGM Resorts had
liquidity(1) of approximately $5.9 billion.
Upon completion of the transaction, MGM Resorts will have
approximately 149 million units, representing a 53% economic
ownership in MGP. In addition, MGM Resorts continues to hold
significant real estate assets, including its ownership of MGM
Springfield, its 50% interest in CityCenter in Las Vegas and its 56% interest in MGM
China.
"Our recent capital raise will allow us to fully fund this final
redemption under the waiver agreement with cash on hand while still
maintaining a balance sheet positioned for future growth," said
James Stewart, CEO of MGM Growth
Properties. "The redemption is expected to be single digit
accretive to our current AFFO per share while allowing us to
maintain pro rata net leverage of 5.3x, which is within our
targeted range of 5.0 to 5.5 times."
(1) MGM Resorts
(excluding MGM China and MGP) historical cash and equivalents of
$3.5 billion and revolver availability of $922 million as of
September 30, 2020, plus adjustments for $740 million of net
proceeds from the issuance of $750 million 4.750% senior notes due
2028 and $700 million of proceeds from this redemption.
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About MGM Resorts International
MGM Resorts
International (NYSE: MGM) is an S&P 500® global entertainment
company with national and international locations featuring
best-in-class hotels and casinos, state-of-the-art meetings and
conference spaces, incredible live and theatrical entertainment
experiences, and an extensive array of restaurant, nightlife and
retail offerings. MGM Resorts creates immersive, iconic experiences
through its suite of Las
Vegas-inspired brands. The MGM Resorts portfolio encompasses
29 unique hotel and destination gaming offerings in the United States and Macau, including some of the most recognizable
resort brands in the industry such as Bellagio, MGM Grand, ARIA and
Park MGM. The Company's 50/50 venture, BetMGM, LLC, offers U.S.
sports betting and online gaming through market-leading brands,
including BetMGM and partypoker. The Company is currently pursuing
targeted expansion in Asia through
the integrated resort opportunity in Japan. Through its "Focused on What Matters:
Embracing Humanity and Protecting the Planet" initiative, MGM
Resorts commits to creating a more sustainable future, while
striving to make a bigger difference in the lives of its employees,
guests, and in the communities where it operates. The global
employees of MGM Resorts are proud of their company for being
recognized as one of FORTUNE® Magazine's World's Most Admired
Companies®. For more information, please visit us at
www.mgmresorts.com. Please also connect with us @MGMResortsIntl on
Twitter as well as Facebook and Instagram.
About MGM Growth Properties
MGM Growth Properties LLC
(NYSE:MGP) is one of the leading publicly traded real estate
investment trusts engaged in the acquisition, ownership and leasing
of large-scale destination entertainment and leisure resorts, whose
diverse amenities include casino gaming, hotel, convention, dining,
entertainment and retail offerings. MGP, together with its
joint venture, currently owns a portfolio of properties, consisting
of 12 premier destination resorts in Las
Vegas and elsewhere across the
United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in
Yonkers, NY, as well as a retail
and entertainment district, The Park in Las Vegas. As of December 31, 2019, our
destination resorts, the Park, Empire Resort Casino, and MGM
Northfield Park collectively comprised approximately 27,400 hotel
rooms, 1.4 million casino square footage, and 2.7 million
convention square footage. As a growth-oriented public real estate
entity, MGP expects its relationship with MGM Resorts and other
entertainment providers to attractively position MGP for the
acquisition of additional properties across the entertainment,
hospitality and leisure industries. For more information about MGP,
visit the Company's website
at http://www.mgmgrowthproperties.com.
Forward-Looking Statements
Statements in this release
that are not historical facts are "forward-looking" statements and
"safe harbor statements" that involve risks and/or uncertainties,
including those described in MGM Resorts' and MGP's public filings
with the SEC. MGM Resorts and MGP have based forward-looking
statements on current expectations and assumptions and not on
historical facts. Examples of these statements include, but are not
limited to, statements MGM Resorts makes regarding the impact of
COVID-19 on its business and its ability to pursue its strategic
goals and statements MGP makes with regard to the expected
accretion from the transaction. These forward-looking statements
involve a number of risks and uncertainties. Among the important
factors that could cause actual results to differ materially from
those indicated in such forward-looking statements include the
continued impact of the COVID-19 pandemic on the businesses of MGM
Resorts and MGP, the general economic conditions and market
conditions in the markets in which the companies operate and
competition with other destination travel locations throughout
the United States and the world,
the design, timing and costs of expansion projects, risks relating
to international operations, permits, licenses, financings,
approvals and other contingencies in connection with growth in new
or existing jurisdictions and additional risks and uncertainties
described in MGM Resorts' and MGP's Form 10-K, Form 10-Q and Form
8-K reports (including all amendments to those reports). In
providing forward-looking statements, neither MGM Resorts nor MGP
is undertaking any duty or obligation to update these statements
publicly as a result of new information, future events or
otherwise, except as required by law. If MGM Resorts or MGP updates
one or more forward-looking statements, no inference should be
drawn that it will make additional updates with respect to those
other forward-looking statements.
Non-GAAP Financial Measures
MGP's pro rata net
leverage ratio presented in this release is calculated by dividing
MGP's total net debt after giving effect to the redemption,
including its pro rata share of the debt at MGP's 50.1% owned joint
venture entity, by MGP's annualized Adjusted EBITDA for the nine
months ended September 30, 2020.
Annualized Adjusted EBITDA is calculated by multiplying Adjusted
EBITDA for the nine months ended September
30, 2020 by the product of twelve months divided by nine
months. The following table sets for MGP's calculation of pro
rata net leverage as of September 30,
2020. Since non-GAAP financial measures are not
calculated in accordance with GAAP, they should not be considered
in isolation of, or as a substitute for, the most directly
comparable GAAP financial measures as an indicator of operating
performance.
($ in
thousands)
|
Nine Months
Ended
|
|
September 30,
2020
|
Net income
(loss)
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$69,111
|
Depreciation
|
178,692
|
Share of depreciation
of unconsolidated affiliate
|
26,361
|
Property
transactions, net
|
194,990
|
Non-cash compensation
expense
|
1,996
|
Straight-line rental
revenues, excluding lease incentive asset
|
38,046
|
Share of
straight-line rental revenues of unconsolidated
affiliate
|
(32,084)
|
Amortization of lease
incentive asset and deferred revenue on non-normal tenant
improvements
|
13,881
|
Acquisition-related
expenses
|
980
|
Non-cash ground lease
rent, net
|
778
|
Other
expenses
|
18,817
|
Loss on unhedged
interest rate swaps, net
|
2,831
|
Provision for income
taxes
|
6,364
|
Interest
income
|
(3,903)
|
Interest
expense
|
164,549
|
Share of interest
expense of unconsolidated affiliate
|
33,672
|
Adjusted
EBITDA
|
$715,081
|
|
|
Annualized Adjusted
EBITDA
|
$953,441
|
|
|
Total principal
amount of debt
|
$3,550,000
|
Less: Cash and cash
equivalents
|
(655,169)
|
Plus: OP Unit
redemption
|
700,000
|
Adjusted Net
Debt
|
$3,594,831
|
Plus: 50.1% of Joint
Venture Debt
|
1,503,000
|
Pro Rata Net
Debt
|
$5,097,831
|
|
|
Pro Rata Net
Leverage
|
5.3x
|
MGM RESORTS
CONTACTS:
|
|
Investment
Community
CATHERINE
PARK
Executive Director of
Investor Relations
cpark@mgmresorts.com
|
News
Media BRIAN AHERN
Director of Media Relations
media@mgmresorts.com
|
|
MGM GROWTH
PROPERTIES LLC CONTACTS:
|
|
Investment
Community ANDY H.
CHIEN Chief Financial
Officer
MGM Growth Properties LLC (702) 669-1470
|
|
News
Media (702) 669-1480 or
media@mgpreit.com
|
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SOURCE MGM Resorts International and MGM Growth Properties
LLC