Gaming and Leisure Properties and Eldorado Resorts Enter Into Agreement for Mutually Beneficial Lease Modifications

WYOMISSING, Pa., June 15, 2020 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or the “Company”) and Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado”) announced today that the companies have agreed to mutually beneficial amendments to their master lease agreement that further both companies’ strategies.   The Amended and Restated Master Lease (the “Master Lease”) is subject to the review of certain gaming regulatory agencies and the expiration of applicable gaming regulatory advance notice periods.

Pursuant to the terms of the agreed upon lease amendment, the variable rent construct and the EBITDAR based escalator test in the existing Master Lease have been eliminated. The portion of the rent subject to escalation will have fixed escalation percentages going forward. Given the backdrop of COVID-19, the companies have agreed upon no rent escalation in each of 2020 and 2021. The fixed escalation term of the Master Lease will commence with a 1.25% escalation on each of October 1, 2022 and October 1, 2023; followed by a 1.75% escalation on each of October 1, 2024 and October 1, 2025. Beginning on October 1, 2026 and for all subsequent lease years, the Master Lease will include a 2.0% fixed annual escalator.  In addition, the companies have agreed to extend the Master Lease’s initial term to 20 years (through September 30, 2038) with a renewal options of up to an additional 20 years.

Further, Eldorado, subject to the satisfaction of certain conditions, can also replace its Tropicana Evansville and/or Tropicana Greenville properties in the Master Lease with one or more properties from a pre-determined list of existing Eldorado properties, provided that the aggregate replacement value is at least equal to the value of Tropicana Evansville and/or Tropicana Greenville, as applicable. In addition, Eldorado will be permitted to divest of the operations of Belle of Baton Rouge Casino & Hotel, with GLPI having the option to divest of its real property interests in such transaction or retain such interests through a new lease.

Peter Carlino, Chief Executive Officer of Gaming and Leisure Properties, commented, “This mutually beneficial agreement demonstrates our continued commitment to improve the durability and predictability of our rental cash flows. The elimination of variable rent volatility from our Master Lease with Eldorado as well as the extension of the initial term are noteworthy accomplishments in our proposed agreement with Eldorado. The amended Master Lease will also create flexibility should Eldorado pursue portfolio realignment following the completion of their pending merger transaction with Caesars Entertainment. We believe the proposed modifications will further enhance our long-term cash flow visibility and more closely align our interests with the Eldorado team as they move towards completion of their transformative Caesars transaction.”