- Collects 100% of rent in May and provides
June rent outlook -
- Initiates settlement of $1.3 billion forward
sale agreements -
- Agrees with Caesars to temporarily modify
certain capital expenditure requirements -
VICI Properties Inc. (NYSE: VICI) (“VICI Properties” or the
“Company”), today provided a business update focused on the
following events:
- Collected 100% of rent for the month of May and anticipates
collecting all rent due for the month of June
- Initiated settlement of forward sale agreements adding
approximately $1.3 billion of cash to total liquidity
- Agreed to temporarily modify certain capital expenditure
requirements under certain leases with Caesars Entertainment
Corporation (“Caesars”), which strengthened Caesars’ liquidity
Real Estate Portfolio Update
In connection with the COVID-19 pandemic, various state
governments and/or regulatory authorities issued directives,
mandates, orders or similar actions restricting non-essential
business operations, resulting in the temporary closure of our
tenants’ operations at our properties. Certain states have begun to
allow for the reopening of casinos to occur, yet timelines for
re-opening differ state by state and we cannot predict the length
of time our tenants’ operations at each specific property will
remain closed.
Since our COVID-19 update on April 16, 2020, all our tenants
fulfilled their rent obligations in full for the month of May and
we expect all June rent will be paid in full.
John Payne, President & Chief Operating Officer of VICI
Properties said, “We are extremely proud of the strength and
commitment of each of our tenants during this unprecedented period.
Our tenants have demonstrated dedication to their employees, and to
the states and municipalities in which they operate gaming
facilities and we are truly proud to serve as their real estate
partners. As we look toward the re-opening of our assets across the
United States, VICI’s portfolio is well diversified from a
geographic perspective with approximately 71% of our rent generated
from assets located in drive-to regional markets and 29% of our
rent generated from assets located on the Las Vegas Strip.”
Capital Markets Activity and Liquidity Update
We have delivered a settlement notice to each of the forward
purchasers to physically settle the forward sale agreements entered
into in connection with the public offering of the Company's common
stock in June 2019. On June 2, 2020, the Company expects to deliver
to the forward purchasers 65,000,000 shares of the Company's common
stock to effect the settlement. The settlement of these shares
(which in effect have been tradeable since the June 2019 forward
equity offering) is expected to result in approximately $1.3
billion of proceeds to the Company, which is intended to ultimately
be used to fund a portion of the Company’s obligations in
connection with the pending Eldorado/Caesars transaction and for
general corporate purposes. Following settlement, no shares of the
Company's common stock will remain subject to future settlement
under the June 2019 forward sale agreements. The Company’s total
shares outstanding will be approximately 533.7 million, as of June
2, 2020 following the expected delivery of the shares to the
forward purchasers pursuant to the forward sale agreements. The
settlement of the forward sale agreements may be delayed due to
certain market disruption events that could affect the Company’s
ability to transfer the shares and receive proceeds therefrom on
the expected settlement date.
“We are grateful to the investors that supported VICI and
purchased shares in our June 2019 offering. Settlement of our
forward sale agreements strengthens our balance sheet with an
additional $1.3 billion of liquidity,” commented David Kieske,
Executive Vice President, Chief Financial Officer of VICI
Properties. “The proceeds from the settlement of the forward sale
agreements, combined with the $2.0 billion of proceeds held in
escrow from our February unsecured notes offering, provides us with
all the capital necessary to close on our part of the pending
Eldorado/Caesars transaction.”
As a result of this activity, we expect to have approximately
$1.7 billion in unrestricted cash and cash equivalents, $2.0
billion in restricted cash, $1.0 billion of availability under our
undrawn revolving credit facility and no debt maturities until
December 2024.
Temporary Modifications to Certain Tenant Capital Expenditure
Requirements
Caesars Entertainment Corporation
On June 1, 2020, VICI Properties and Caesars entered into an
Omnibus Amendment to Leases (the “Omnibus Amendment”) in connection
with the ongoing COVID-19 pandemic and its impact on operations and
financial performance. The Omnibus Amendment provides Caesars and
certain subsidiaries of Caesars with certain relief with respect to
a portion of their capital expenditure obligations under the
Non-CPLV lease, the CPLV lease and the Joliet lease (collectively,
the “Caesars Leases”).
“At VICI, we strive to engage energetically with our tenants
and, in this time of COVID-19, this engagement has risen to an even
higher level,” said Mr. Payne. "The steps we have taken with
Caesars demonstrate our ability to work constructively in enhancing
their liquidity during this pandemic, while preserving our rent
under the respective leases.”
Pursuant to the Omnibus Amendment, Caesars will be granted
certain relief with respect to a portion of the capital expenditure
obligations under the Caesars Leases conditioned upon Caesars and
certain subsidiaries of Caesars (i) funding of certain minimum
capital expenditures in fiscal year 2020 (which represent a
reduction of the minimum capital expenditure amounts currently set
forth in the Caesars Leases), (ii) making timely payment of rent
obligations under the Caesars Leases during the compliance period
set forth in the Omnibus Amendment and (iii) no tenant event of
default occurring under any of the Caesars Leases during the
compliance period set forth in the Omnibus Amendment. Caesars will
receive credit for certain deemed capital expenditure amounts,
which credit may be used to satisfy certain capital expenditure
obligations over the rolling 2020, 2021 and 2022 fiscal years,
provided that the foregoing conditions are satisfied. If Caesars
fails to satisfy any of the foregoing conditions, Caesars will be
required to satisfy the capital expenditure obligations set forth
in the Caesars Leases or, in certain cases, to deposit amounts in
respect thereof into a capital expenditure reserve in accordance
with the Omnibus Amendment. The Omnibus Amendment will not become
effective unless and until all applicable gaming regulatory
approvals, notices and notice periods have been obtained, given or
expired, as the case may be.
Century Casinos, Inc.
Additionally, in May 2020, the Company entered into an amendment
to the triple net lease agreement entered into with Century
Casinos, Inc. (“Century”) in connection with the acquisition of
three casino properties in December 2019 (the “Century Master
Lease”). The Century Master Lease contains certain covenants,
including minimum capital expenditures. The covenants under the
Century Master Lease began on January 1, 2020; however, as a result
of the casino closures in connection with the COVID-19 pandemic,
the Company has agreed to waive Century’s capital expenditure
requirements for 2020 and defer to not later than December 31, 2021
certain other expenditures contemplated in connection with the
underwriting of the acquired casino properties. Pursuant to the
amendment to the Century Master Lease, the capital expenditure
relief is conditioned upon (i) Century’s timely payment of rent
obligations under the Century Master Lease during the compliance
period set forth in the amendment and (ii) no tenant event of
default occurring under the Century Master Lease during the
compliance period set forth in the amendment. If Century fails to
satisfy any of the foregoing conditions, Century will be required
to satisfy the capital expenditure obligations set forth in the
Century Master Lease or, in certain cases, to deposit amounts in
respect thereof into a capital expenditure reserve for expenditure
in accordance with the amendment.
About VICI Properties
VICI Properties is an experiential real estate investment trust
that owns one of the largest portfolios of market-leading gaming,
hospitality and entertainment destinations, including the
world-renowned Caesars Palace. VICI Properties’ national,
geographically diverse portfolio consists of 28 gaming facilities
comprising over 40 million square feet and features approximately
15,600 hotel rooms and more than 180 restaurants, bars and
nightclubs. Its properties are leased to industry leading gaming
and hospitality operators, including Caesars Entertainment
Corporation, Century Casinos Inc., Hard Rock International, JACK
Entertainment and Penn National Gaming, Inc. VICI Properties also
owns four championship golf courses and 34 acres of undeveloped
land adjacent to the Las Vegas Strip. VICI Properties’ strategy is
to create the nation’s highest quality and most productive
experiential real estate portfolio. For additional information,
please visit www.viciproperties.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. You can identify these
statements by our use of the words “anticipates”, “assumes,”
“believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,”
“projects,” and similar expressions that do not relate to
historical matters. All statements other than statements of
historical fact are forward-looking statements. You should exercise
caution in interpreting and relying on forward-looking statements
because they involve known and unknown risks, uncertainties, and
other factors which are, in some cases, beyond the Company’s
control and could materially affect actual results, performance, or
achievements.
Among those risks, uncertainties and other factors are the
impact of changes in general economic conditions, including low
consumer confidence, unemployment levels and depressed real estate
prices resulting from the severity and duration of any downturn in
the U.S. or global economy (including stemming from the COVID-19
pandemic and changes in the economic conditions as a result of the
COVID-19 pandemic); risks that the Company may not achieve the
benefits contemplated by our pending and recently completed
acquisitions of real estate assets; risks that not all potential
risks and liabilities have been identified in the Company’s due
diligence for our pending and recently completed transactions;
risks regarding the ability to receive, or delays in obtaining, the
governmental and regulatory approvals and consents required to
consummate our pending transactions, or other delays or impediments
to completing our pending transactions; our ability to obtain the
financing necessary to complete our pending transactions on the
terms we currently expect or at all; the possibility that our
pending transactions may not be completed or that completion may be
unduly delayed; and the effects of our recently completed
acquisitions and the pending transactions on us, including the
post-acquisition impact on our financial condition, financial and
operating results, cash flows, strategy and plans.
Currently, one of the most significant factors that could cause
actual outcomes to differ materially from our forward-looking
statements is the impact of the COVID-19 pandemic on the financial
condition, results of operations, cash flows and performance of the
Company and its tenants. The extent to which the COVID-19 pandemic
impacts the Company and its tenants will largely depend on future
developments that are highly uncertain and cannot be predicted with
confidence, including the impact of the actions taken to contain
the pandemic or mitigate its impact, and the direct and indirect
economic effects of the pandemic and containment measures on our
tenants, including various state governments and/or regulatory
authorities issuing directives, mandates, orders or similar actions
restricting freedom of movement and business operations, such as
travel restrictions, border closures, business closures,
limitations on public gatherings, quarantines and “shelter-at-home”
orders resulting in the closure of our tenants’ operations at our
properties. Each of the foregoing could have a material adverse
effect on our tenants’ ability to satisfy their obligations under
their leases with us, including their continued ability to pay rent
in a timely manner, or at all, and/or to fund capital expenditures
or make other payments required under their leases. In addition,
changes and instability in global, national and regional economic
activity and financial markets as a result of the COVID-19 pandemic
could negatively impact consumer discretionary spending and travel,
which could have a material adverse effect on our tenants’
businesses.
Although the Company believes that in making such
forward-looking statements its expectations are based upon
reasonable assumptions, such statements may be influenced by
factors that could cause actual outcomes and results to be
materially different from those projected. The Company cannot
assure you that the assumptions upon which these statements are
based will prove to have been correct. Additional important factors
that may affect the Company’s business, results of operations and
financial position are described from time to time in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2019,
Quarterly Reports on Form 10-Q and the Company’s other filings with
the Securities and Exchange Commission. The Company does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise, except as may be required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200601005703/en/
Investors: Investors@viciproperties.com (646) 949-4631
Or
David Kieske EVP, Chief Financial Officer
DKieske@viciproperties.com
Danny Valoy Vice President, Finance
DValoy@viciproperties.com
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