VICI Makes Jump to IG Status Following Moody’s Upgrade
Casino landlord VICI Properties (NYSE: VICI) landed another investment-grade credit rating after Moody’s Investors Service upgraded the real estate investment trust (REIT) on Monday.
In a report out on Monday, the agency lifted its rating on the Caesars Palace owner to “Baa3” from “Ba1” with a “stable” outlook. The “Baa3” mark is the lowest investment-grade rating on Moody’s scale, but it’s undoubtedly a step in the right direction for VICI, which like many REITs, depends on access to capital markets to finance important acquisitions.
We have used each transformational transaction along the way to improve our balance sheet and to best position ourselves for credit rating improvements. This rating upgrade solidifies our investment grade status across all three rating agencies,” said CFO David Kieske in a statement.
The Moody’s upgrade arrived less than three weeks after VICI delivered third-quarter results, which included a second increase to the REIT’s 2024 adjusted funds from operations (AFFO) guidance.
Why Moody’s VICI Upgrade Matters
Moody’s upgrade of VICI is important on multiple levels. Following that move, the REIT carries investment-grade ratings from all three major ratings agencies, with the other two being Fitch Ratings and S&P Global Ratings.
Second, corporate borrowers that have investment-grade marks — particularly those with the aforementioned trifecta — enjoy lower financing costs than comparable junk-rated companies. That’s to say, the higher VICI’s credit rating climbs, the lower its interest rates will be on borrowings, including issued corporate bonds.
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