{"id":279447,"date":"2023-06-28T17:36:47","date_gmt":"2023-06-28T22:36:47","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=279447"},"modified":"2023-06-29T11:24:30","modified_gmt":"2023-06-29T16:24:30","slug":"vici-properties-keeps-low-ig-credit-rating-at-fitch","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/","title":{"rendered":"VICI Credit Rating Affirmed at BBB-, Outlook Stable"},"content":{"rendered":"

VICI Properties\u2019 (NYSE: VICI) corporate credit grade was affirmed at \u201cBBB-,\u201c with a \u201cstable\u201d outlook in a new report by Fitch Ratings.<\/p>\n

\"Caesars
Caesars Palace on the Las Vegas Strip. Owner VICI Properties maintained an investment-grade credit rating at Fitch. (Image: CNN<\/em>)<\/figcaption><\/figure>\n

That means the largest landlord on the Las Vegas Strip carries the lowest possible investment-grade credit rating. Fitch noted that an upgrade to that mark is possible if the real estate investment trust (REIT) can sustain a net debt\/earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio below 4.5x, if it diversifies its tenant base and if VICI and its rivals show the ability to easily tap capital markets if needed.<\/p>\n

\n

In terms of tenant diversification<\/a>, VICI\u2019s two biggest clients are MGM Resorts International (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR), providing the REIT with significant exposure to the Las Vegas Strip, as well as a slew of regional casino markets.<\/p>\n<\/div>\n

VICI\u2019s client roster includes Apollo Global Management, Century Casinos, and Hard Rock International, among others, confirming the gaming REIT is diverse across regions and casino sizes. Fitch notes MGM and Caesars combine for 76% of VICI\u2019s adjusted revenue.<\/p>\n

VICI’s Favorable Fundamentals<\/h2>\n

At a time of elevated stress<\/a> in some corners of the commercial real estate market, namely office space, VICI stands tall in the broader real estate sector. Strong rent collections and an ability to thrive in inflationary environments are among the factors underpinning the REIT\u2019s investment thesis.<\/p>\n

Positively, the company has stable occupancy and rent collections with CPI-linked escalators, though overall gaming REITs have weaker contingent liquidity compared with more traditional CRE property types, which is a drag on the rating,\u201d<\/strong> according to Fitch. \u201cThe ratings also contemplate Fitch’s expectation of deleveraging below 5.5x by YE 2024; if deleveraging is delayed as a result of operational issues or capital allocation, the ratings or Outlook may be revised.\u201d<\/strong><\/p><\/blockquote>\n

Because of a spate of deal-making<\/a> over the past couple of years that significantly expanded the REIT\u2019s client and property rosters, VICI\u2019s leverage is running toward the higher end of the historical range. Fitch believes the company can drive that figure down to 5x to 5.5x by the end of 2024.<\/p>\n

\u201cDeleveraging will result from a combination of annual contractual increases in rental income (all fixed, but includes potential upside from CPI-linked escalators) and whether retained cash flow post-merger is directed toward acquisitions,\u201d added the ratings agency.<\/p>\n

VICI Could Be Longer-Term Candidate<\/h2>\n

Better credit ratings are imperative for any company, because the higher an issuer\u2019s grade is, the more it saves in interest payments when it sells corporate debt.<\/p>\n

Ratings agencies, such as Fitch, typically don\u2019t take corporate downgrades or upgrades lightly. But VICI is a credible candidate for a credit grade boost over the long haul. The ongoing desirability of Las Vegas and regional casino real estate is one reason why<\/strong>.<\/p>\n

\u201cPositively, non-traditional owners have increasingly been purchasing Las Vegas real estate (e.g. private equity), which has led to cap rate compression and is a longer-term positive as it relates to the attractiveness of Las Vegas gaming real estate,\u201d concluded Fitch. \u201cRegional gaming outperformed many of the other hard-hit sectors during the pandemic, which should also be a longer-term positive as it relates to the attractiveness of regional gaming real estate.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

VICI Properties\u2019 (NYSE: VICI) corporate credit grade was affirmed at \u201cBBB-,\u201c with a \u201cstable\u201d outlook in a new report by Fitch Ratings. That means the largest landlord on the Las Vegas Strip carries the lowest possible investment-grade credit rating. Fitch noted that an upgrade to that mark is possible if the real estate investment trust […]<\/p>\n","protected":false},"author":46,"featured_media":208796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,81886],"tags":[81903,23],"acf":[],"yoast_head":"\nVICI Properties Keeps Low IG Credit Rating At Fitch<\/title>\n<meta name=\"description\" content=\"Fitch maintains low IG credit grade on VICI, sees opportunity for deleveraging.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VICI Properties Keeps Low IG Credit Rating At Fitch\" \/>\n<meta property=\"og:description\" content=\"Fitch maintains low IG credit grade on VICI, sees opportunity for deleveraging.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-28T22:36:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-29T16:24:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/CP-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1660\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/\",\"url\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/\",\"name\":\"VICI Properties Keeps Low IG Credit Rating At Fitch\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/CP-scaled.jpg\",\"datePublished\":\"2023-06-28T22:36:47+00:00\",\"dateModified\":\"2023-06-29T16:24:30+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Fitch maintains low IG credit grade on VICI, sees opportunity for deleveraging.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/vici-properties-keeps-low-ig-credit-rating-at-fitch\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/CP-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/04\/CP-scaled.jpg\",\"width\":2560,\"height\":1660,\"caption\":\"Caesars Palace on the Las Vegas Strip. Owner VICI Properties retained an investment-grade credit rating at Fitch Ratings. 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