Credit rating agency Moody’s Investors Service has upgraded MGM Resorts International’s corporate family rating to Ba3 from B2, with a stable outlook. This concludes the review of MGM Resorts’ ratings that was initiated in October, Moody’s said in a statement on Tuesday.
The two-notch upgrade follows the establishment by MGM Resorts of a subsidiary, MGM Growth Properties LLC, as a publicly traded real estate investment trust (REIT). MGM Growth Properties closed last week its initial public offering, raising proceeds of approximately US$1.1 billion.
The REIT is being spun out of MGM Resorts and includes a total of 10 properties, all in the United States, according to regulatory filings.
In Tuesday’s statement, Moody’s said the creation of the REIT entity increases MGM Resorts’ financial flexibility and results in a significant reduction in refinancing risks for the company. The ratings agency noted that MGM Resorts sold the real estate associated with its 10 properties to the REIT entity and used the proceeds to repay its existing bank facilities (amounting to US$2.7 billion) and 2016 bond maturities (amounting to US$1.2 billion).
Moody’s additionally said it expects MGM Resorts’ ratio of consolidated gross debt to EBITDA (earnings before interest, taxation, depreciation and amortisation) to “decline from 6.5x at year-end 2015 to about 6.0x at year-end 2016 and to 4.8 times year-end 2017”.
“MGM [Resorts] is on solid footing to further improve its credit profile over the next few years,” said Moody’s analyst, Peggy Holloway, in a statement.
Sep 17, 2021The act of a patron leaving their deposits with a Macau casino, via the respective VIP host or a junket, should still be legitimate as long as the deposit funds involved are used only for gambling,...
”We are moving rapidly as we execute on our strategy and the planned divestitures are well-progressed”
President and chief executive of casino equipment provider Scientific Games