Acquisition of Borgata Hotel Casino and Spa Completed by MGM Growth Properties LLC
MGM Resorts International and MGM Growth Properties LLC completed the acquisition transaction for Borgata Hotel Casino and Spa. The completion of the deal comes after MGM Resorts purchased Boyd Gaming stake in Borgata. Borgata’s real property was purchased from MGM Resorts and was leased back to a subsidiary of the company that will in return operate the property.
The acquisition was funded by MGP. $545 million of the debt was refinanced by MGM Resorts subsidiary with $295 million in borrowings, $260 million cash and 27,362,136 operating partnership units. The borrowings are under senior revolving credit facilities.
MGM Resorts and MGP has an existing Master Lease, which Borgata has been added to. An increase of $100 million will be added to the initial rent payment. The terms of the lease will be fixed and grow at 2pc until 2022.
“Our ability to enhance our portfolio with a premier asset like Borgata in such early stages of our company demonstrates our focus on prudent growth and the financial flexibility of our balance sheet. This transaction brings geographic diversification and increased cash flows to our portfolio while maintaining neutral leverage and resulting in high single digit percentage accretion to AFFO per share,” said James Stewart, Chief Executive Officer of MGM Growth Properties.
About MGM Growth Properties LLC
MGM Growth Properties LLC (NYSE: MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings.