Eldorado Resorts and VICI Properties Enter Into LOI for $400 Million Mortgage, Las Vegas

Main Photo: The Las Vegas Strip

Date: June 2020

Location: Las Vegas Strip, Nevada, USA

Name: Caesars Forum Convention Centre

Owner: Eldorado Resorts, Inc. announced yesterday it has signed a letter of intent to enter into a US$400 million mortgage with VICI Properties Inc. that is secured by the recently opened Caesars Forum Convention Center in Las Vegas.

The 5 year mortgage will bear interest at a rate of 7.7% subject to a 2% annual escalation and will be pre-payable beginning in year 3 subject to certain conditions. The Caesars Forum Convention Center will remain subject to the existing Put/Call Agreement between Caesars Entertainment Corporation and affiliates of VICI, with certain modifications, including VICI’s call option accelerating to 2025.

Additionally, VICI has agreed to acquire approximately 23 acres of undeveloped land parcels adjacent to the centre of the Las Vegas Strip for $4.5 million per acre, for total proceeds of approximately $103.5 million. The total expected proceeds from both transactions is approximately $503.5 million.

The mortgage and the acquisition of the land parcels are pursuant to a non-binding letter of intent with VICI and the closing of such transactions is conditioned upon the completion of the pending business combination of Eldorado and Caesars and remains subject to completion of due diligence and negotiation of definitive documentation, and other customary closing conditions, including receipt of regulatory approvals. The closing of the loan and the acquisition of the land are intended to occur concurrently in the third quarter of 2020 and are cross conditioned.

“We are pleased to further our relationship with VICI through these transactions. The combination of these two transactions will serve to strengthen our balance sheet and provide added liquidity,” said Tom Reeg, Chief Executive Officer of Eldorado.

THPT Comment: Good to see money borrowing flowing during these Covid-19 times.

First Seen: Hotel News Resource

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