MGM China has announced plans to issue US$500 million in senior unsecured notes due 2031. This move aims to reduce borrowings under its revolving credit facility, as reported by Fitch Ratings. The company’s existing senior unsecured notes hold a rating of “BB-” from Fitch, reflecting its current financial standing.
Fitch Ratings
Fitch does not anticipate significant changes to MGM China’s capital structure or recoveries post the notes offering. The agency maintains its “BB-” rating, emphasizing MGM’s mid-5x EBITDAR leverage, conservative financial policies, and strong liquidity. Fitch acknowledges MGM’s scale, competitive position, and market diversification across Las Vegas and regional markets as key strengths.
Moody’s Assessment
Moody’s Investors Service has assigned a “B1” rating to MGM China’s proposed US$500 million notes offering. Moody’s views the refinancing as leverage-neutral, noting that recent drawdowns on the revolving credit facility were used to repay maturing $750 million notes, thereby extending the debt maturity profile.
Financial Impact and Strategic Context
The issuance of new notes is part of MGM China’s strategy to optimize its debt structure and manage liquidity effectively. By pushing out the maturity of a portion of its debt, the company aims to enhance financial flexibility amidst evolving market conditions.
Market Reaction and Investor Sentiment
Investors are closely monitoring MGM China’s financial moves, considering the company’s robust liquidity position and strategic initiatives. The market response to the notes offering will likely reflect investor confidence in MGM China’s ability to navigate economic uncertainties and capitalize on growth opportunities.
MGM China’s issuance of senior unsecured notes represents a strategic financial decision aimed at strengthening its capital base and extending debt maturities. With supportive ratings from Fitch and Moody’s, the company continues to uphold a prudent financial approach amidst its operational expansion in both Las Vegas and regional markets.