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VICI Properties (NYSE:VICI) L.P. ("VICI LP"), a subsidiary of VICI Properties Inc., a prominent specialized REIT with a market capitalization of $29.8 billion, has completed the offering of $750 million in senior unsecured notes with a 5.125% interest rate, maturing on November 15, 2031. According to InvestingPro analysis, VICI maintains excellent financial health with a GREAT overall score, and the stock currently appears undervalued based on Fair Value estimates. The transaction took place today, with the notes issued at 99.643% of their par value.
The proceeds from the offering are earmarked to redeem VICI LP's existing 3.500% senior notes due February 15, 2025, with a total principal amount of $750 million. The company's strong financial position is evidenced by its impressive current ratio of 15.87x and moderate total debt-to-capital ratio of 0.37x, as reported by InvestingPro. The redemption is scheduled for tomorrow, and the redemption price is set at 100% of the principal amount plus accrued interest.
The newly issued notes will pay interest semi-annually and are ranked equally with VICI LP's other unsecured and unsubordinated indebtedness. While VICI Properties Inc. does not guarantee the notes, they could be guaranteed by certain VICI LP subsidiaries under specific circumstances tied to other obligations.
The notes come with covenants limiting VICI LP's ability to incur secured and unsecured debt and to engage in mergers, consolidations, or asset sales, subject to notable exceptions. Additionally, VICI LP must maintain a ratio of total unencumbered assets to unsecured indebtedness.
VICI LP has the option to redeem the notes before their maturity at a specified price and, after September 15, 2031, at 100% of their principal amount plus accrued interest. The notes are secured by a pledge of the limited partnership interests in VICI LP owned by VICI Properties OP LLC.
In other recent news, VICI Properties reported a steady financial performance in its third-quarter earnings call. The company announced an adjusted funds from operations (AFFO) per share increase of 4.9% to $0.57 and updated its full-year AFFO guidance to between $2.36 billion and $2.37 billion. VICI Properties also reported approximately $2.9 billion in total liquidity, with $160 million in cash, and total debt standing at $17.1 billion.
Executives highlighted strategic investments in the Las Vegas market, a disciplined approach to acquisitions, and positive partnerships in both gaming and non-gaming sectors. The company has deployed $230 million through loans and partner property growth fund agreements and is exploring investments in both gaming and non-gaming sectors, including youth sports facilities.
In terms of future expectations, VICI Properties is considering further investments in the youth sports sector and looking to expand its international footprint, notably in Canada. However, the management acknowledges unique risks associated with tribal gaming structures and industry volatility.
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