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Vici Properties Offers $400M Mortgage Loan To Caesars Entertainment
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Vici Properties Offers $400M Mortgage Loan To Caesars Entertainment

VICI Properties (VICI) has announced that it has provided a $400 million mortgage loan to a subsidiary of Caesars Entertainment.

As set out in the June letter of intent, the loan is secured by the Caesars Forum Convention Center in Las Vegas, and was funded by VICI with cash on hand.

The loan bears interest at an initial rate of 7.7%, has a term of 5 years and is pre-payable beginning in year 3 subject to certain conditions. The Caesars Forum Convention Center is subject to an amended Put/Call Agreement between Caesars (CZR) and VICI, with VICI’s call option being accelerated to 2025 in connection with the entry into the mortgage loan.

Additionally, Caesars and VICI revealed that they have now waived the conditionality of the mortgage transaction on the closing of a sale by Caesars to VICI of 23 acres of land near The LINQ Hotel & Casino, Bally’s Las Vegas, Paris Las Vegas and Planet Hollywood gaming facilities.  

However, the companies say that they continue to evaluate the potential transaction involving this area.

An experiential real estate investment trust, Vici owns one of the largest portfolios of gaming, hospitality and entertainment destinations, including Caesars Palace.

Shares in Vici have dropped 7% year-to-date, but the stock still scores a bullish Strong Buy Street consensus. Meanwhile the average analyst price target of $28 indicates 17% upside potential from current levels.

“Sports/iGaming and margin expansion are the two most transformative themes in our coverage and Regional Gaming companies are uniquely positioned to enjoy the most upside,” commented Merrill Lynch analyst Shaun Kelley recently.

He has a buy rating on Vici, and $24 price target, and listed the stock as one of his five top picks in the gaming world. (See VICI stock analysis on TipRanks)

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