Item 1.01 Entry into a Material Definitive Agreement.
On August 12, 2016, MGM Growth Properties Operating Partnership LP (the Issuer) and MGP Finance Co-Issuer, Inc. (the Co-Issuer and
together with the Issuer, the Issuers), indirect subsidiaries of MGM Resorts International, a Delaware corporation (the Company), issued $500 million in aggregate principal amount of their 4.500% senior unsecured notes due
2026 (the Notes) under an indenture dated as of August 12, 2016 (the Indenture), among the Issuers, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee. The Notes were sold in the
United States only to accredited investors pursuant to an exemption from the Securities Act of 1933, as amended (the Securities Act), and subsequently resold to qualified institutional buyers pursuant to Rule 144A under the
Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act.
The Issuers intend to use the net proceeds of the
offering, or approximately $492.2 million (after giving effect to discounts, commissions and offering expenses), to refinance amounts outstanding under the Issuers revolving credit facility that were drawn in connection with MGM Growth
Properties LLCs acquisition of the real property of Borgata Hotel Casino and Spa from the Company, which was completed on August 1, 2016. Any remaining proceeds will be used for general corporate purposes.
The Notes will mature on September 1, 2026. The Company will pay interest on the Notes on March 1 and September 1 of each year, commencing
on March 1, 2017. Interest on the Notes will accrue at a rate of 4.500% per annum and be payable in cash.
The Notes will be fully and
unconditionally guaranteed, jointly and severally, by each of the Issuers direct and indirect wholly owned material domestic subsidiaries, excluding the Co-Issuer, that guarantees the Issuers senior credit agreement or any other material
capital markets indebtedness. The notes will not be guaranteed by or be the obligations of the Company, MGM Growth Properties LLC, MGM Growth Properties OP GP LLC, or the Companys other subsidiaries.
The Issuers may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus, to the extent the Issuers are
redeeming Notes prior to the date that is three months prior to their maturity date, an applicable make whole premium, plus, in each case, accrued and unpaid interest.
The Indenture contains customary covenants that will limit the Issuers ability and, in certain instances, the ability of the Issuers subsidiaries,
to borrow money, create liens on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments
from subsidiaries, enter into transactions with affiliates, issue guarantees of debt, and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the Indenture. A
copy of the Indenture is incorporated by reference hereto as Exhibit 4.1.
Events of default under the Indenture include, among others, the following
with respect to the Notes: default for 30 days in the payment when due of interest on the Notes; default in payment when due of the principal of, or premium, if any, on the Notes; failure to comply with certain covenants in the Indenture for 60 days
after the receipt of notice from the trustee or holders of 25% in aggregate principal amount of the Notes of such series; acceleration or payment default of debt of the Issuers or a significant subsidiary thereof in excess of a specified amount that
remains uncured for 30 days; certain events of bankruptcy or insolvency; and the master lease or the guaranty related thereto terminating or ceasing to be effective in certain circumstances. In the case of an event of default arising from
certain events of bankruptcy or insolvency with respect to the Issuers, all Notes then outstanding will become due and payable immediately without further action or notice. If any other event of default occurs with respect to the Notes, the trustee
or holders of 25% in aggregate principal amount of the Notes may declare all the Notes to be due and payable immediately.
The description set forth above
is qualified in its entirety by reference to the full text of the Indenture incorporated by reference hereto as Exhibit 4.1. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the
Notes.
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