Casino operator MGM Resorts International says it has completed arrangements that will see it borrow more money for longer.
The United States-based firm issued a written statement on Thursday that detailed changes to its senior credit agreement that increase the company’s ‘term loan A’ facility by about US$520 million to US$750 million; add US$250 million to a revolving facility, boosting it to US$1.5 billion; and extend the maturity date of the facilities to 2023.
The company said it expects to use the money to refinance other debts; fund recently announced transactions; and cover general corporate purposes. The statement offered no further detail, aside from a quote from the company’s management.
“We remain focused on maintaining a fortified balance sheet and achieving our consolidated net leverage ratio goal of three to four times by year-end 2020,” said MGM Resorts International chief financial officer Dan D’Arrigo.
The initial cost of the amended revolving and ‘term loan A’ facilities is expected to be the London Interbank Offered Rate plus 2.25 percent, which represents a reduction on the previous rate of 50 basis points.
The casino and hospitality group has ambitions for a number of capital-intensive ventures, including a casino licence in Japan, where the capital cost of a resort could be US$10 billion, according to James Murren, MGM Resorts’ chairman.
An MGM Resorts International subsidiary, MGM China Holdings Ltd, runs two casino resorts in Macau – MGM Macau and MGM Cotai. In May, Grant Bowie, chief executive of MGM China, said the Macau unit would like to build a 900-room hotel tower extension to MGM Cotai “some time in the next three years”. The US$3.4-billion MGM Cotai was officially launched in February and currently has 1,390 rooms.
MGM China has also recently restructured some of its lending arrangements and pushed back the deadlines for repayment. In June, the parent organisation said it would double the size of a public offering of debt to US$1 billion worth of 5.75-percent unsecured senior notes due in 2025 at par.
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