GGRAsia – MGM China parent completes US$750mln note offer

MGM China parent completes US$750mln note offer

Oct 14, 2020 Newsdesk Latest News, Macau, Top of the deck, World

The parent of Macau casino operator MGM China Holdings Ltd has completed issuance of US$750 million in 4.750-percent senior notes due in 2028.

United States-based MGM Resorts International said in a Tuesday filing that it would use the net proceeds for “general corporate purposes, which could include refinancing existing indebtedness”.

Pending such use, the company “may invest the net proceeds in short-term interest-bearing accounts, securities or similar investments,” it added.

The size of the offer of the notes – which were issued at par – had been increased from US$500 million to its current level due to the exercise getting a favourable reception from investors.

The notes will not be guaranteed by MGM China, or by the company’s other “foreign subsidiaries and certain domestic subsidiaries”, said the filing.

Corey Sanders, the parent’s chief financial officer and treasurer, said in prepared comments in a press release accompanying the filing on the offer closure: “The successful execution of this upsized offering, at a favourable rate, further solidifies our financial flexibility and demonstrates the continued confidence our investors have in our long-term business outlook”.

In the second quarter, the parent firm made a loss of US$857.3 million, saying in commentary that “the impact of Covid-19” would have a “material impact on its consolidated results of operations during 2020 and potentially thereafter”.

MGM Resorts held cash and cash equivalents amounting to just under US$4.84 billion as of June 30, according to its second-quarter results, filed on August 3.

As of June 30, the group had long-term net debt amounting to nearly US$11.34 billion.

The Macau unit, MGM China, said its second-quarter net revenues fell 95.3 percent year-on-year amid the Covid-19 pandemic, while adjusted property earnings before interest, taxation, depreciation and rent or restructuring (EBITDAR) fell into negative territory.

MGM China’s Macau gaming rights run until June 2022, in common with Macau’s five other licensees. A public retender process is anticipated in Macau, associated with that expiry phase.