VICI recently completed a $3.4 billion equity offering including the greenshoe, settled its 26.9 million share forward sale agreement from June 2020 for total cash proceeds of roughly $527 million, and has approximately $1.9 billion of proceeds remaining to be settled from previous March 2021 forward sale agreement. The proceeds partially funded the repayment of VICI’s $2.1 billion secured term loan B and as a result, VICI has only unsecured debt outstanding.

This equity component also supports the pro forma company’s ability to achieve its 5.0x-5.5x net leverage target in a reasonable time frame that is consistent with a low investment grade IDR over the long term.

In addition, VICI launched a change of control consent and exchange offer to MGP’s $4.2 billion unsecured noteholders. The offer includes exchange consideration for MGP’s senior notes maturing 2024-2029 with like notes to be issued by VICI (VICI Exchange Notes) and a small cash consent payment. Fitch expects to resolve the Rating Watch around the time of closing, which may take place more than six months in the future and will likely assign ratings to the new exchange notes around that time. The VICI Exchange Notes will be pari passu with VICI’s existing unsecured notes, which are currently rated ‘BB’/RWP and will continue to be rated on par with VICI’s IDR upon resolution of the RWP.

The RWP reflects the combined company's improved credit profile relative to standalone VICI's 'BB' IDR, notwithstanding the likely temporary increase in net leverage above VICI's 5.0x-5.5x target to fund the MGP acquisition. Pro forma VICI will have reduced tenant concentration, improved asset quality following the addition of MGP's Las Vegas Strip properties and market-leading regional casinos, a fully unencumbered asset pool and a well staggered maturity schedule.

The combined company's strengthened credit profile and 5.0x-5.5x net leverage target will likely be consistent with a low investment-grade IDR over the long term. This is supported by the initial funding mix of both the pending Venetian and MGP acquisitions, which includes a considerable amount of equity from the September 2021 issuance and settlement of previous forward sales.

For more information, please see the Aug. 5, 2021 press release titled “Fitch Places VICI Properties on Rating Watch Positive Following MGP Announcement”, which is available at www.fitchratings.com.