- Legal States
Mike Johnson June 16, 2020 3 min read
Eldorado Secures $400M Loan from VICI, Sells Land for $103M
Eldorado Resorts announced Monday after stock market close that it entered into deals with VICI Properties to generate $500 million ahead of the completion of its mega-merger deal with Caesars Entertainment.
Eldorado Secures Loan from VICI
The Reno-based casino operator signed a letter of intent to enter into a $400 million mortgage deal secured by Caesars Forum Convention Center in Las Vegas. As part of the assets of Caesars, Eldorado is expected to acquire the property after the tie up with Caesars Entertainment is competed. The 5 year mortgage will bear 7.7% interest rate that will be escalated annually by 2%, and will become pre-payable after year 2 subject to certain conditions.
“Our mortgage on the Caesars Forum Convention Center will produce immediate economic benefits for VICI’s stockholders and incremental liquidity for the combined Caesars/Eldorado.”Ed Pitoniak, CEO, VICI Properties
VICI Consolidates Land Ownership
The other $100 million Eldorado will generate from the sale of adjacent to the center of the Las Vegas Strip parcels, 23 acres of undeveloped land that will be sold to VICI Properties at the price of $4.5 million per acre, for approximately $103.5 million. The acquisition will expand the land VICI owns in the vicinity of Harrah’s Las Vegas, The Linq, Flamingo, Bally’s, Paris and Planet Hollywood on the east side of the Strip, to 50 acres in total, as VICI already has 27 acres there.
“Our consolidation of the land parcels that run from the Caesars Forum Convention Center and the adjacent and magnificent MSG Sphere at the north to the backside of Planet Hollywood at the south gives VICI an unrivaled opportunity, over time, to partner with world-class developers and operators in creating the next great Las Vegas place—a multi-property, multi-dimensional experience.”Ed Pitoniak, CEO, VICI Properties
Both transactions are conditioned upon the completion of the merger between Eldorado and Caesars and are subject to due diligence and other closing conditions, with the loan and acquisition intended to occur concurrently during the third quarter of the year.
“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.”Tom Reeg, CEO, Eldorado Resorts
The completion of the $17.3 billion merger deal between Eldorado Resorts and Caesars Entertainment is going into its last stage, pending the approval from Nevada, Indiana and New Jersey gaming regulators, as well as from the Federal Trade Commission. Both parties recently expressed optimism that the tie up will be completed along the timetable they initially outlined, despite obvious delays due to the restrictions stemming from the ongoing health crisis.
Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his weekdays to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.