Long-term Debt

Long-term debt consisted of the following (amounts in thousands):



	December 31,
	2016			2015
$1.5 billion Term Loan B Facility, due June 8, 2023, interest at a margin above LIBOR or base rate (3.75% at December 31, 2016), net of unamortized discount and deferred issuance costs of $42.9 million at December 31, 2016	$	1,449,591		$	—
$225 million Term Loan A Facility, due June 8, 2021, interest at a margin above LIBOR or base rate (3.20% at December 31, 2016), net of unamortized discount and deferred issuance costs of $7.4 million at December 31, 2016	211,978			—
$685 million Revolving Credit Facility, due June 8, 2021, interest at a margin above LIBOR or base rate (3.44% weighted-average at December 31, 2016)	120,000			—
$1.625 billion Term Loan Facility, due March 1, 2020, interest at a margin above LIBOR or base rate (4.25% at December 31, 2015), net of unamortized discount and deferred issuance costs of $45.6 million	—			1,423,026
$350 million Revolving Credit Facility, due March 1, 2018, interest at a margin above LIBOR or base rate (6.00% at December 31, 2015)	—			20,000
$500 million 7.50% Senior Notes, due March 1, 2021, net of unamortized discount and deferred issuance costs of $9.4 million and $11.3 million at December 31, 2016 and 2015, respectively	490,568			488,735
Restructured Land Loan, due June 16, 2017, interest at a margin above LIBOR or base rate (5.27% and 3.92% at December 31, 2016 and 2015, respectively), net of unamortized discount of $0.6 million and $2.1 million, respectively	115,378			112,517
Other long-term debt, weighted-average interest of 3.92% and 4.46% at December 31, 2016 and 2015, respectively, maturity dates ranging from 2017 to 2027	34,786			110,919
Total long-term debt	2,422,301			2,155,197
Current portion of long-term debt	(46,063		)	(88,937		)
Long-term debt, net	$	2,376,238		$	2,066,260

New Credit Facility

In June 2016, the Company entered into a new credit agreement consisting of a $225 million term loan A facility (the “Term A Facility”), a $1.5 billion term loan B facility (the “Term B Facility”) and a $685 million revolving credit facility (the “Revolver”, and collectively the “New Credit Facility”).

In January 2017, the Company entered into an amendment to the New Credit Facility (the “Amendment”) to, among other things, (a) increase the Term B Facility by $125.0 million to an aggregate outstanding principal amount of $1.6 billion and (b) reduce the applicable margin for LIBOR loans from 3.00% to 2.50% and the applicable margin for alternate base rate loans from 2.00% to 1.50%. Pursuant to the terms of the New Credit Facility, as a result of the reduction in margin effected by the Amendment, the Company incurred a repricing fee in the amount of 1.00% of the aggregate principal amount of the Term B Facility outstanding prior to the incurrence of the incremental Term B Facility borrowings. The Company applied the proceeds of the incremental Term B Facility borrowings to repay outstanding borrowings under its Revolver and pay fees and expenses incurred in connection with the Amendment.

At December 31, 2016, the Company's borrowing availability under the Revolver, subject to continued compliance with the terms of the New Credit Facility, was $531.8 million, which was net of $120.0 million of outstanding borrowings and $33.2 million in outstanding letters of credit and similar obligations. The amount outstanding under the Revolver at December 31, 2016 was primarily used to fund the acquisition of Palms, which is described in Note 3.

The Term A Facility and the Revolver will mature in June 2021. The Term B Facility will mature in June 2023. The Company must pay a 1.00% premium if it prepays the Term B Facility prior to June 8, 2017. The Company is required to make quarterly principal payments of $2.8 million on the Term A Facility and $3.8 million on the Term B Facility, on the last day of each quarter. In addition, the Company is required to make mandatory payments of amounts outstanding under the New Credit Facility with the proceeds of certain casualty events, debt issuances, asset sales and equity issuances and, depending on its consolidated total leverage ratio, the Company is required to apply a portion of its excess cash flow to repay amounts outstanding under the New Credit Facility, which would reduce future quarterly principal payments.

At December 31, 2016, the Term A Facility and debt incurred under the Revolver bear interest at a rate per annum, at the Company’s option, equal to either LIBOR plus an amount ranging from 1.75% to 2.75% or an alternate base rate plus an amount ranging from 0.75% up to 1.75%, depending on the Company’s consolidated total leverage ratio. At December 31, 2016, the margin applicable to the Term A Facility and Revolver for LIBOR loans and alternate base rate loans was 2.50% and 1.50%, respectively. The Term B Facility bears interest at a rate per annum, at the Company’s option, equal to either LIBOR plus 3.00%, or an alternate base rate plus 2.00%, subject to a minimum LIBOR rate of 0.75% at December 31, 2016.

Borrowings under the New Credit Facility are guaranteed by all of the Company’s existing and future material restricted subsidiaries and are secured by pledges of all of the equity interests in the Company and its material restricted subsidiaries, a security interest in substantially all of the personal property of the Company and the subsidiary guarantors, and mortgages on the real property and improvements owned or leased by certain of the Company’s subsidiaries.

The New Credit Facility contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and the subsidiary guarantors to incur debt; create a lien on collateral; engage in mergers, consolidations or asset dispositions; pay dividends or make distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; or modify their lines of business.

The New Credit Facility also includes certain financial covenants, including the requirements that the Company maintain throughout the term of the New Credit Facility and measured as of the end of each quarter, a maximum consolidated total leverage ratio of not more than 6.50 to 1.00 through June 30, 2017, 6.25 to 1.00 for September 30, 2017 through September 30, 2018, 5.75 to 1.00 for December 31, 2018 through March 31, 2019, 5.50 to 1.00 for June 30, 2019 through December 31, 2019 and 5.25 to 1.00 thereafter. The Company is also required to maintain an interest coverage ratio of not less than 2.50 to 1.00 measured on the last day of each quarter. A breach of the financial ratio covenants shall only become an event of default under the Term B Facility if the lenders providing the Term A Facility and the Revolver take certain affirmative actions after the occurrence of a default of such financial ratio covenants. At December 31, 2016, the Company's total leverage ratio was 4.66 to 1.00 and its interest coverage ratio was 4.62 to 1.00, both as defined in the New Credit Facility, and the Company believes it was in compliance with all applicable covenants.

The proceeds from the New Credit Facility were used to repay all amounts outstanding under the Company's $1.625 billion term loan facility and $350 million revolving credit facility (together, the “Prior Credit Facility”), which was terminated in June 2016. Such transactions are referred to herein as the “Refinancing Transaction”. The Company evaluated the Refinancing Transaction on a lender by lender basis and accounted for the portion of the transaction that did not meet the accounting criteria for debt extinguishment as a debt modification. As a result of the Refinancing Transaction, the Company recognized a $6.6 million loss on debt extinguishment and modification, which included $2.9 million in third-party fees and the write-off of $3.7 million in unamortized debt discount and debt issuance costs related to the extinguished principal amount under the Prior Credit Facility.

7.50% Senior Notes

In March 2013, the Company issued $500 million in aggregate principal amount of 7.50% senior notes due March 1, 2021 (the “7.50% Senior Notes”), pursuant to an indenture (the “Indenture”) among the Company, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. The 7.50% Senior Notes are guaranteed by all subsidiaries of the Company other than unrestricted subsidiaries including Landco Holdco and its subsidiaries, MPM, and Restaurant Holdco. Interest is due March 1 and September 1 of each year.

The Company may redeem all or a portion of the 7.50% Senior Notes at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest to the applicable redemption date:



Years Beginning March 1,	Percentage
2017	103.750	%
2018	101.875	%
2019 and thereafter	100.000	%

The Indenture governing the 7.50% Senior Notes requires that the Company offer to purchase the 7.50% Senior Notes at a purchase price in cash equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest thereon if the Company experiences certain change of control events (as defined in the Indenture). The Indenture also requires that the Company make an offer to repurchase the 7.50% Senior Notes at a purchase price equal to 100% of the principal amount of the purchased notes if it has excess net proceeds (as defined in the Indenture) from certain asset sales.

The Indenture contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the Company’s ability and the ability of its restricted subsidiaries to incur or guarantee additional debt; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or pay dividends or distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the Indenture. The Indenture also provides for events of default which, if any of them occurs, would permit or require the principal and accrued interest on the 7.50% Senior Notes to be declared due and payable.

Restructured Land Loan

In June 2011, an indirect wholly owned subsidiary of the Company, CV PropCo, LLC (“CV Propco”), as borrower, entered into an amended and restated credit agreement (the “Restructured Land Loan”) with Deutsche Bank AG Cayman Islands Branch (“Deutsche Bank”) and JPMorgan Chase Bank, N.A. as initial lenders (the “Land Loan Lenders”), consisting of a term loan facility with a principal amount of $105 million. In July 2016 CV Propco entered into the First Loan Modification Agreement and Omnibus Amendment (the “First Modification”) with respect to the amended and restated credit agreement governing the Restructured Land Loan. Pursuant to the First Modification, CV Propco has three one-year extension options. CV Propco exercised its first one-year option to extend the maturity date of the Restructured Land Loan from June 2016 to June 2017 and paid an extension fee of $1.2 million. During the first extension period, the Restructured Land Loan bears interest at a rate per annum, at CV Propco’s option, equal to either LIBOR plus 4.50% or an alternate base rate plus 3.50%. In connection with the Restructured Land Loan, CV Propco entered into interest rate cap agreements with a combined notional amount of $117 million that limit LIBOR to a maximum of 1.50%.

Pursuant to the First Modification, the Land Loan Lenders agreed to release their lien on a parcel of land located on the northeast corner of Interstate 15 and Cactus Avenue in Las Vegas (the “Cactus Assemblage”) upon a sale of the Cactus Assemblage that satisfies specified conditions. One of the conditions to the release of the Cactus Assemblage is a maximum loan to value ratio of 50% following such release, which the Company may satisfy by delivering a guaranty in an amount up to $40.0 million. In addition, if the Cactus Assemblage is sold on or before June 16, 2017: (i) beginning on June 17, 2017, and through all extension periods, interest will accrue at a rate equal to LIBOR plus 4.50% (as opposed to 5.50%) (ii) immediately upon closing of the sale, CV Propco will have the option of paying cash interest at a rate per annum of LIBOR plus 3.00% with the remaining interest to be paid in kind, and (iii) CV Propco and NP Tropicana LLC (“NP Tropicana”) had the option, exercisable on or before June 17, 2017, to repurchase the outstanding warrants to purchase 60% of the interests of CV Propco and NP Tropicana that were held by the Land Loan Lenders at December 31, 2016 for $4.0 million or to cancel such warrants for no consideration if the Restructured Land Loan was paid in full on or before June 17, 2017. The warrants were issued to the Land Loan Lenders as part of the consideration for their agreement to enter into the Restructured Land Loan in 2011, and were exercisable for a nominal exercise price commencing on the earlier of (i) the date that the Restructured Land Loan was repaid, (ii) the date CV Propco sold any land to a third party, and (iii) the fifth anniversary of the Restructured Land Loan.

In March 2017, CV Propco and the Land Loan Lenders entered into the Second Modification Agreement and Consent (the “Second Modification”) with respect to the amended and restated credit agreement governing the Land Loan Lenders. Pursuant to the Second Modification, (i) CV Propco paid Deutsche Bank $61.8 million plus accrued and unpaid interest then due to Deutsche Bank under the Restructured Land Loan in full settlement of all obligations (including outstanding principal in the amount of $72.6 million) owed to Deutsche Bank under the Restructured Land Loan and (ii) the outstanding warrants to purchase 60% of the interests of CV Propco and NP Tropicana were canceled. After the March 2017 repayment, the aggregate principal amount outstanding under the Restructured Land Loan was $43.5 million.

In order for CV Propco to execute the second and third one-year extension options, CV Propco is required to, among other things, pay an extension fee for each extension option equal to 1.00% of the Restructured Land Loan's then outstanding principal balance. At December 31, 2016, CV Propco had the intent and ability to execute the second one-year extension option to extend the Restructured Land Loan’s maturity date to June 17, 2018. Accordingly, the amounts outstanding under the Restructured Land Loan were excluded from the current portion of long-term debt at December 31, 2016.

The credit agreement governing the Restructured Land Loan contains a number of customary covenants that, among other things and subject to certain exceptions, restrict CV Propco’s ability and the ability of its restricted subsidiaries to incur or guarantee additional debt; create liens on collateral; engage in activity that requires CV Propco to be licensed as a gaming company; engage in mergers, consolidations or asset dispositions; make distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; or make capital expenditures. The Company believes CV Propco was in compliance with all applicable covenants at December 31, 2016.

The credit agreement governing the Restructured Land Loan contains a number of customary events of default (subject to grace periods and cure rights). If any event of default occurs, the lenders under the Restructured Land Loan would be entitled, in certain cases, to take various actions, including accelerating amounts due thereunder and taking all actions permitted to be taken by a secured creditor.

The Restructured Land Loan is guaranteed by NP Tropicana, NP Landco Holdco LLC (a subsidiary of the Company and parent of CV Propco and NP Tropicana) and all subsidiaries of CV Propco. The Restructured Land Loan is secured by a pledge of the equity of CV Propco and NP Tropicana and all tangible and intangible assets of NP Tropicana, Landco Holdco and CV Propco and its subsidiaries, principally consisting of land located on the southern end of Las Vegas Boulevard at Cactus Avenue and land surrounding Wild Wild West. The Restructured Land Loan is also secured by the leasehold interest in the land on which Wild Wild West is located. The land carry costs of CV Propco are supported by the Company under a limited support agreement and recourse guaranty (the “Limited Support Agreement”). Under the Limited Support Agreement, the Company guarantees the net operating costs of CV Propco and NP Tropicana. Such net operating costs include timely payment of all capital expenditures, taxes, insurance premiums, other land carry costs and any indebtedness payable by CV Propco (excluding debt service for the Restructured Land Loan), as well as rent, capital expenditures, taxes, management fees, franchise fees, maintenance, and other costs of operations and ownership payable by NP Tropicana. Under the Limited Support Agreement, the Company also guarantees certain recourse liabilities of CV Propco and NP Tropicana under the Restructured Land Loan, including, without limitation, payment and performance of the Restructured Land Loan in the event any of CV Propco, Landco Holdco or NP Tropicana files or acquiesces in the filing of a bankruptcy petition or similar legal proceeding.

Other Debt

Included in Other long-term debt at December 31, 2015, was $51.5 million of debt associated with Fertitta Entertainment's credit facility, which was fully repaid as part of the Fertitta Entertainment Acquisition. Fertitta Entertainment recognized a loss on debt extinguishment of $0.5 million in connection with the repayment. Also included in Other long-term debt at December 31, 2015 was $21.3 million in debt related to an aircraft owned by a consolidated subsidiary of Fertitta Entertainment. Fertitta Entertainment sold this subsidiary to a related party in April 2016, as described in Note 18. Accordingly, the Company did not assume the debt related to the aircraft.

Corporate Office Lease

The Company leases its corporate office building under a lease agreement which was entered into in 2007 pursuant to a sale-leaseback arrangement with a third-party real estate investment firm. The lease has an initial term of 20 years with four five-year extension options. The lease also contains two options for the Company to repurchase the corporate office building, one option at the end of year five of the original lease term, which was not exercised, and another option at the end of year ten of the original lease term, which is exercisable in November 2017. The options constitute continuing involvement under the accounting guidance for sale-leaseback transactions involving real estate. As a result, the sale-leaseback transaction is accounted for as a financing transaction. The corporate office building is included in Property and equipment, net on the Consolidated Balance Sheets and is being depreciated according to the Company’s policy. The carrying amount of the related obligation is $31.8 million, which is included in long-term debt on the Consolidated Balance Sheets, and the lease payments are recognized as principal and interest payments on the debt. The lease payment in effect at December 31, 2016 was $3.3 million on an annualized basis, which will increase annually by the greater of 1.25% or the percentage increase in a cost of living factor, not to exceed 2%.

Minimum lease payments on the corporate office lease for each of the next five years are as follows (amounts in thousands):



Years Ending December 31,
2017	$	3,367
2018	3,409
2019	3,451
2020	3,494
2021	3,538

Principal Maturities

Scheduled principal maturities of the Company's long-term debt for each of the next five years and thereafter are as follows (amounts in thousands):



Years Ending December 31,
2017	$	46,063
2018	145,396
2019	51,117
2020	29,273
2021	798,459
Thereafter	1,412,264
	2,482,572
Debt discounts and issuance costs	(60,271		)
	$	2,422,301