VICI increases notes offering $2.25B to help pay for ‘previously announced’ deals Howard Stutz, CDC Gaming Reports · November 22, 2019 at 4:59 am Real estate investment trust VICI Properties increased its previously announced notes offering Thursday from $1.75 billion to $2.25 billion. Las Vegas-based VICI, which will have spent roughly $4.9 billion on acquisitions since the company was spun off from Caesars Entertainment in 2017, planned to use the proceeds from the offering to refinance the mortgage on Caesars Palace in Las Vegas. The company said in a filing with the Securities and Exchange Commission it intends to use the remaining proceeds to “pay certain fees and expenses, and consummate certain other previously announced transactions.” In the filing, VICI said $1.25 billion of the notes would be due in 2026 and the other $1 billion would be due in 2029. The REIT has been expanding its partnerships beyond its lease agreements with Caesars Entertainment that cover more than 20 gaming properties across the U.S. The most recent deal came at the end of October through a $843 million acquisition of Jack Cleveland and Thistledown Racetrack Casino just east of Cleveland in suburban North Randall. Detroit-based Jack Entertainment will continue to operate the properties through a lease agreement. The transaction was VICI’s fifth deal in partnership with a casino company in the past 12 months. Jack sold Greektown Casino in Detroit to VICI this spring. The company subsequently leased the property to Penn National Gaming. The summer, after the sale of Jack Cincinnati to VICI was finalized, the REIT leased the property to Seminole Indian Tribe’s Hard Rock Entertainment, which will rebrand the resort. In June, Eldorado Resorts sold three regional casinos – Mountaineer Casino Racetrack and Resort in New Cumberland, West Virginia; Isle Casino Cape Girardeau in Cape Girardeau, Missouri; and Lady Luck Casino Caruthersville in Caruthersville, Missouri to VICI for $278 million. Colorado-based Century Casino will pay $107 million for the operations of the three properties and sign a 15-year lease agreement with VICI for annual rent of $25 million per year. The transaction is expected to close next year. VICI is also a participant in the $17.3 billion merger between Eldorado and Caesars Entertainment. Three Caesars properties – Harrah’s New Orleans, Harrah’s Atlantic City and Harrah’s Laughlin – were sold to VICI for a combined $1.8 billion. The operations will be leased back to Eldorado for total annual rent of $154 million once the deal closes next year. Prior to the pending deals, VICI owned the real estate and buildings associated with 24 gaming properties in 11 states. By law, REITs don’t pay federal income taxes. With real estate as their primary source of income, REITs are required to distribute at least 90 percent of their taxable earnings to shareholders, and investors are taxed at their individual tax rate for the ordinary income portion of the dividend. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.