Gaming And Leisure Properties Prices Senior Notes Worth $1.1B
Zacks Investment Research | Aug 19, 2019 07:41AM ET
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) recently announced the pricing of the previously-announced public offering of senior unsecured notes that will be issued by its operating partnership, GLP Capital, L.P. as well as GLP Financing II, Inc., a wholly-owned subsidiary of the operating partnership.
The notes will be issued in two tranches. The first tranche, consisting of senior notes worth $400 million, will mature in 2024. It has been priced with a coupon of 3.350%. The second tranche, consisting of $700-million worth notes, is due in 2030 and has been priced with a coupon of 4%. The notes will be guaranteed by the company.
Subject to certain closing conditions, the offering is anticipated to close on Aug 29, 2019.
Net proceeds from the offering are estimated to be roughly $1,087.9 million. The company intends to use nearly $340 million and $236 million of the net proceeds to pay down outstanding balances under the operating partnership’s revolving credit facility and Term Loan A-1 facility (excluding any accrued and unpaid interest thereon), respectively.
Also, management intends to use $512 million of the net proceeds to fund a cash tender offer to purchase up to $500 million aggregate principal amount of the company’s outstanding 4.875% senior unsecured notes scheduled to mature on Nov 1, 2020.
Any remaining net proceeds will be used for general corporate purposes or to repay additional borrowings under the Term Loan A-1 facility.
By paying down its debt obligations, this offering is likely to provide flexibility to the company. In addition, it reflects the company’s focus to address its financial obligations in an efficient way. Moreover, since unsecured notes can be borrowed at lower rates, the new debt will result in lower funding cost.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 2.7 %, underperforming the Zacks Investment Research
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