Fitch puts VICI on positive watch

Fitch Ratings said it placed the ratings of VICI Properties Inc., subsidiaries VICI Properties LP and VICI Properties 1 LLC and their debt on rating watch positive following the announced acquisition of MGM Growth Properties (MGP).

“The RWP reflects the combined company's improved credit profile relative to stand-alone VICI's BB issuer default rating (IDR), notwithstanding the likely temporary increase in net leverage above VICI's 5x-5.5x target to fund the acquisition. Pro forma VICI will have reduced tenant concentration, improved asset quality following the addition of MGP's Las Vegas Strip properties and market-leading regional casinos, further progress toward a fully unencumbered asset pool and a well staggered maturity schedule,” Fitch said in a press release.

“The combined company's strengthened credit profile and 5x-5.5x net leverage target will likely be consistent with a low investment-grade IDR over the long term, with the initial funding mix influencing the timing of positive rating actions,” the agency added.

Fitch said it expects to resolve the positive watch around the time the deal closes.

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