MGM Resorts International, the parent of Macau-based MGM China Holdings Ltd, on Thursday announced it was pricing a public offering of US$1.15 billion in aggregate principal amount of 6 percent senior unsecured notes due 2023. The transaction is expected to close on November 25, the firm said in a statement.
The company said it plans to use the net proceeds for general corporate purposes, including repaying certain debt maturing in 2015 and funding a portion of the development costs related to its Maryland and Massachusetts resort projects.
MGM has already paid a US$85 million licensing fee to Massachusetts to move forward the plan to construct the US$800 million casino project (pictured in a rendering) in Springfield.
“Pending such use, the company may invest the net proceeds in short-term interest-bearing accounts, securities or similar investments,” MGM Resorts said.
Fitch Ratings Inc said it views the issuance positively. “It largely addresses MGM’s liquidity needs through the development phase of the company’s projects in Macau (US$2.9 billion), Maryland (US$1.2 billion) and Massachusetts (US$800 million),” the rating agency said in a statement.
“The issuance should be largely leverage neutral if MGM uses the proceeds to refinance US$875 million in 6.625 percent senior notes that come due in July 2015,” it added.
On Thursday, casino operator Wynn Resorts Ltd, which is present in Macau through Wynn Macau Ltd, also announced a new credit agreement.
The credit agreement is comprised of a US$375 million senior secured revolving credit facility that will mature on November 20, 2019, and a US$875 million delay draw senior secured term loan facility that will mature on November 20, 2020 and will require quarterly principal payments, scheduled to begin on June 30, 2018.
Wynn America LLC, a subsidiary of Wynn Resorts, is to use the proceeds of the credit facilities primarily for capital expenditures for the construction of a US$1.6-billion casino resort in Everett, Massachusetts.
The proceeds will also be used for other general corporate purposes, including to fund working capital, capital expenditures and permitted acquisitions, Wynn Resorts said in a filing to the Securities and Exchange Commission.
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