Macau casino operator MGM China Holdings Ltd plans to issue U.S-dollar-denominated senior notes for professional investors. The firm said in a Tuesday filing to the Hong Kong Stock Exchange it would use the net proceeds to repay a portion of the amounts outstanding under its 2025 revolving credit facility, and for general corporate purposes.
The 2025 facility is in an aggregate amount of up to HKD23.40 billion (US$2.99 billion) with a final maturity date of April 15, 2030.
CreditSights and associated business Fitch Ratings Inc said in respective Tuesday memos that the new notes were anticipated to be unsecured instruments in the amount of US$750 million and due in 2033.
Fitch has assigned the “anticipated US$750 million” senior unsecured notes due 2033 a ‘BB-‘ rating and a recovery rating of ‘RR4’.
Fitch currently rates MGM China’s and parent MGM Resorts International’s long-term issuer default rating (IDR) at ‘BB-‘, with a ‘stable’ outlook.
The rating agency said MGM China’s leverage “is expected to remain unchanged”. Fitch estimates gross leverage at MGM China “at 2.1 times”, and expects it to “remain near that level over the forecast horizon”.
Fitch said it “believes the company’s ability to refinance debt is strong, given its improved competitive position, stable free cash flow generation and access to capital markets.”
MGM China posted a 9.2 percent year-on-year rise in first-quarter revenue, though new branding fee arrangements with MGM Resorts had some impact on profitability. The Macau unit runs the MGM Macau property (pictured) on Macau peninsula, and MGM Cotai in the Cotai casino district.
Fitch observed: “MGM China has performed well in the Macau market despite uncertainty in the Chinese economy and a more promotional environment. EBITDA [earnings before interest, taxation, depreciation and amortisation] increased 11 percent in 2025 and the company has strengthened its competitive position.”
CreditSights stated that “talk” suggested the interest on the proposed notes would be “in the 6.50 percent area”. But it added: “Looking at other high-yield Macau casino operator comparators, we see fair value closer to 6.30 percent.”
CreditSights further noted that US$663.3-million of the 2025 revolving credit facility had been drawn as of March 31.
The institution said MGM China is expected to use its revolving credit facility to repay its upcoming May 2026 bond maturity, which it said was in the aggregate of US$750 million at 5.875 percent interest.
The CreditSights analysts wrote: “Proceeds from the latest 2033 bond offering will be subsequently used to repay the incremental borrowings on the revolving credit facility; as such, management expects the offering to have a neutral impact to leverage.”
