| Debt | NOTE 6 — DEBT
Debt consists of the following:
September 30, 2016
(in
thousands)
Senior secured credit facility:
Senior secured term loan A facility $ 292,500
Senior secured term loan B facility 1,840,750
Senior secured revolving credit facility —
$1,050 million 5.625% senior notes, due 2024 1,050,000
$500 million 4.50% senior notes, due 2026 500,000
3,683,250
Less: Unamortized discount and debt issuance costs (62,569 )
$ 3,620,681
Operating Partnership bridge facilities.
Operating Partnership credit agreement.
The credit agreement contains customary covenants that, among other
things, limit the ability of the Operating Partnership and its
restricted subsidiaries to: (i) incur additional indebtedness;
(ii) merge with a third party or engage in other fundamental
changes; (iii) make restricted payments; (iv) enter into,
create, incur or assume any liens; (v) make certain sales and
other dispositions of assets; (vi) enter into certain
transactions with affiliates; (vii) make certain payments on
certain other indebtedness; (viii) make certain investments;
and (ix) incur restrictions on the ability of restricted
subsidiaries to make certain distributions, loans or transfers of
assets to the Operating Partnership or any restricted subsidiary.
These covenants are subject to a number of important exceptions and
qualifications, including, with respect to the restricted payments
covenant, the ability to make unlimited restricted payments to
maintain the REIT status of MGP. The revolving credit facility and
term loan A facility also require the Operating Partnership to
maintain compliance with a maximum secured net debt to adjusted
total asset ratio, a maximum total net debt to adjusted asset ratio
and a minimum interest coverage ratio, all of which may restrict
the Operating Partnership’s ability to incur additional debt
to fund its obligations in the near term. As of September 30, 2016,
MGP was required to have a senior secured net debt to adjusted
total assets ratio of not more than 0.40 to1.00, a total net debt
to adjusted total assets ratio of not more than 0.60 to 1.00, and
an interest coverage ratio of not less than 2.00 to1.00. MGP
was in compliance with its credit agreement covenants at September
30, 2016.
The credit agreement also provides for customary events of default,
including, without limitation, (i) payment defaults,
(ii) inaccuracies of representations and warranties,
(iii) covenant defaults, (iv) cross-defaults to certain
other indebtedness in excess of specified amounts, (v) certain
events of bankruptcy and insolvency, (vi) judgment defaults in
excess of specified amounts, (vii) actual or asserted
invalidity or impairment of any loan documentation, (viii) the
security documents cease to create a valid and perfected first
priority lien on any material portion of the collateral,
(ix) ERISA defaults, (x) termination of the Master Lease
and (xi) change of control. The term loan facilities are
subject to amortization of principal in equal quarterly
installments, with 5.0% of the initial aggregate principal amount
of the term loan A facility and 1.0% of the initial aggregate
principal amount of the term loan B facility to be payable each
year. The revolving credit facility and the term loan facilities
are both guaranteed by each of the Operating Partnership’s
existing and subsequently acquired direct and indirect wholly owned
material domestic restricted subsidiaries, and secured by a first
priority lien security interest on substantially all of the
Operating Partnership’s and such restricted
subsidiaries’ material assets, including mortgages on its
real estate, subject to customary exclusions.
Operating Partnership senior notes.
On August 12, 2016, the Operating Partnership issued $500 million
in aggregate principal amount of 4.500% senior notes due 2026. The
senior notes will mature on September 1, 2026. Interest on the
senior notes is payable on March 1 and September 1 of
each year, commencing on March 1, 2017. The senior notes are
fully and unconditionally guaranteed, jointly and severally, on a
senior basis by all of the Operating Partnership’s
subsidiaries that guarantee the Operating Partnership’s
credit facilities, other than MGP Finance Co-Issuer, Inc., which is
a co-issuer of the senior notes. The Operating Partnership may
redeem all or part of the senior notes at a redemption price equal
to 100% of the principal amount of the senior notes plus, to the
extent the Operating Partnership is redeeming senior 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 indentures governing the senior notes contain customary
covenants that limit the Operating Partnership’s ability and,
in certain instances, the ability of its subsidiaries, to
borrow money, create liens on assets, make distributions and pay
dividends on or redeem or repurchase Operating Partnership units,
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 applicable
indentures governing the senior notes, including, with respect to
the restricted payments covenants, the ability to make unlimited
restricted payments to maintain the REIT status of the Company.
Maturities of debt.
Year ending December 31,
( in thousands )
2016 $ 8,375
2017 33,500
2018 33,500
2019 33,500
2020 33,500
2021 247,250
Thereafter 3,293,625
$ 3,683,250
Deferred financing costs. |
