Glpi Credit Agreement

The GLPI Credit Agreement: What You Need to Know

The Gaming and Leisure Properties, Inc. (GLPI) is a real estate investment trust (REIT) that owns and leases gaming and related facilities across the United States. As a publicly traded company, GLPI has various financing options to fund its operations, one of which is the GLPI Credit Agreement. Here`s what you need to know about this financial arrangement.

What is the GLPI Credit Agreement?

The GLPI Credit Agreement is a credit facility that allows GLPI to borrow money from a syndicate of lenders led by JPMorgan Chase Bank, N.A. The credit facility has a maximum borrowing amount of $1.75 billion and matures on May 9, 2025.

What is the purpose of the GLPI Credit Agreement?

The GLPI Credit Agreement serves as a source of liquidity for GLPI to finance its real estate investments, including acquisitions, development projects, and capital expenditures. The credit facility also provides GLPI with financial flexibility to manage its debt obligations and optimize its capital structure.

What are the terms of the GLPI Credit Agreement?

The GLPI Credit Agreement has a relatively low-interest rate compared to other types of debt financing, such as bonds or preferred stock. As of March 31, 2021, the interest rate on the credit facility was 2.10% per annum. The credit agreement has a variable rate, which means that the interest rate may change over time based on market conditions.

GLPI also has to comply with certain covenants under the credit agreement, including maintaining a minimum interest coverage ratio and a maximum leverage ratio. These covenants ensure that GLPI remains financially sound and can meet its debt service obligations.

What are the risks associated with the GLPI Credit Agreement?

Like any form of debt financing, the GLPI Credit Agreement comes with risks. For instance, if GLPI fails to meet its debt service obligations or breaches the covenants under the credit agreement, it may face penalties or default on the loan. This can lead to a loss of investor confidence and negatively impact the company`s stock price.

Additionally, the variable interest rate on the GLPI Credit Agreement exposes GLPI to interest rate risk. If interest rates rise, GLPI`s borrowing costs will increase, reducing the company`s cash flow and profitability.

Conclusion

The GLPI Credit Agreement is an important financing tool for GLPI that provides the company with liquidity and financial flexibility. However, like any financial arrangement, it comes with risks that investors and stakeholders should be aware of. By understanding the terms and risks of the GLPI Credit Agreement, investors can make informed decisions about their investments in GLPI.

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