Gaming and Leisure Properties Partners with Caesars to Finance Tribal Casino Development

Gaming and Leisure Properties has partnered with Caesars Entertainment to develop the Caesars Republic Sonoma County resort through a $225 million financing commitment. The deal deepens ties between the two companies and highlights Gaming and Leisure Properties' expertise in tribal casino financing. The partnership aims to support the development of the resort in Sonoma County, California.

Gaming and Leisure Properties (NASDAQ: GLPI) has announced a significant financing commitment of $225 million to support the development of the Caesars Republic Sonoma County resort. The deal, which was announced on Tuesday, is a collaboration between Gaming and Leisure Properties, Caesars Entertainment (NASDAQ: CZR), and the Dry Creek Rancheria Band of Pomo Indians. The financing package includes a $180 million delayed draw term loan at a 12.50% fixed rate and a $45 million term loan B yielding 13.95%, with a blended interest rate of 12.79% [1].

The financing arrangement is structured to provide high-yield returns during the development phase while securing long-term, stable income for Gaming and Leisure Properties. Upon maturity of the six-year term loans, the financing arrangement transitions into a 45-year lease agreement with a minimum annual rent of $112.5 million at a 9.75% cap rate. This innovative financing model not only delivers high-yield returns but also ensures a consistent lease income for Gaming and Leisure Properties [2].

Construction on the resort began in August, with completion targeted for summer 2027. The project, located in Sonoma wine country, will feature 1,000 slot machines, 28 table games, a 100-room hotel, four restaurants, three bars, a luxury spa, a pool, and a fitness center. The existing River Rock Casino will remain operational during construction [1].

The partnership between Gaming and Leisure Properties and Caesars Entertainment is seen as deepening their strategic alliance. Additionally, it marks a significant expansion into tribal casino financing for Gaming and Leisure Properties. The deal highlights the company's expertise in this area and its ability to provide lower-cost financing options to tribal casinos while securing long-term lease guarantees [2].

Shares of Gaming and Leisure Properties are down 0.3% on a year-to-date basis, while Caesars Entertainment is off just under 20%. Despite the recent market fluctuations, the partnership and financing deal underscore the companies' commitment to growth and development in the gaming industry [1].

References:
[1] https://seekingalpha.com/news/4491004-gaming-and-leisure-properties-deepens-ties-with-caesars-through-a-tribal-casino-financing-deal
[2] https://www.morningstar.com/news/globe-newswire/9521391/gaming-leisure-properties-furthers-tribal-partnership-with-accretive-long-term-financing-for-caesars-republic-sonoma-county