WYOMISSING, Pa., Oct. 01, 2018 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (Nasdaq:GLPI) announced that it has successfully completed the previously announced acquisition of the real estate assets of five casino properties from Tropicana Entertainment, Inc. for $964 million. The assets to be acquired are Tropicana Atlantic City, Tropicana Evansville, Tropicana Laughlin, Trop Casino Greenville and The Belle of Baton Rouge. Concurrently, Eldorado Resorts, Inc. (NASDAQ: ERI) will acquire the operating assets of these properties and lease the real estate from the Company through a new master lease with a 15-year initial term and four 5-year renewal periods. Initial annual rent is $87.6 million and the initial rent coverage is approximately 2.0x based on pro forma last twelve months ended June 30, 2018 Tropicana Adjusted EBITDA (excluding Aruba and Corporate) per ERI’s 8-k filed on September 6, 2018. Terms of the new lease with Eldorado are similar to the Company’s existing Master Leases, except that for the first-five lease years the 2% annual escalation of Building Based Rent is subject to an adjusted revenue to rent ratio (as defined in the Master Lease) threshold for the properties in the aggregate of 1.2:1 and thereafter at 1.8:1. Additionally, the Company provided a $246 million mortgage loan to Eldorado to finance its acquisition of the real estate assets of Lumiere Place from Tropicana, with initial annual interest payments of $22.4 million. The combined properties include 350,000 casino square feet, 7,416 slot machines, 237 table games and 4,993 hotel rooms.
The Company funded the transaction with proceeds from the publicly registered senior unsecured notes offering, which closed on September 26, 2018, with an aggregate principal amount of $1.100 billion, plus proceeds from the Company’s revolving credit facility.
Chief Executive Officer, Peter M. Carlino, commented, “We are pleased to consummate this accretive transaction, which materially increases our real estate income and further diversifies our geographic base. The addition of Eldorado as a new tenant diversifies our cash flow and offers a new partner for potential future transactions. To expedite the required transaction approvals, we worked with Eldorado to amend the initial purchase agreement for Lumiere Place and achieve an outcome with equivalent economic terms. This new structure demonstrates our ability to offer innovative solutions that benefit our partners and shareholders. The Company continues to expect this transaction along with our pending transaction with Penn National Gaming, Inc., Boyd Gaming Corp. and Pinnacle Entertainment, Inc. to be accretive to our annual dividend by approximately 8% to 10%. The Company anticipates providing updated dividend guidance upon completion of the pending transaction, which is expected later this month.”
About Gaming and Leisure Properties
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year.
