MGM Resorts Completes $750M Senior Notes Offering Due 2028

MGM Resorts International announced in an investor update today it successfully completed a previously announced issuance of senior notes to the amount of $750 million due 2028 and priced at 4.75% annually.

The new debt issuance was initiated in April, amid the uncertainty regarding the ongoing health crisis which forced federal and state authorities to shut down casino properties. By that time casino operators were busy trimming costs and ensuring extra liquidity, to ensure their business sustainability. Besides expanding on their revolving credit lines, issuing of new debt was another way for them to boost liquidity.

Upscaling the Notes Offering

Initially, the new offering sought to achieve $500 million, but due to the interest in the company’s senior notes, MGM upsized the amount with 50%. MGM Resorts plans on using the net proceeds from the notes offering for general corporate purposes, including refinancing of its existing debt or in short-term interest bearing accounts, securities or similar investments

“The successful execution of this upsized offering at a favorable rate further solidifies our financial flexibility and demonstrates the continued confidence our investors have in our long-term business outlook.”

Corey Sanders, Chief Financial Officer and Treasurer, MGM Resorts International

Current Debt Situation

As at the end of June, MGM had a total debt of $11.4 billion, including $3.7 billion stemming from its ownership of the real estate investment trust MGM Growth Partners and $2.5 billion indebtedness of its Macau subsidiary, MGM China.

There was another development for MGM Resorts in August, when investment giant InterActiveCorp (IAC) acquired a 12% stake in the casino and hospitality operator for $1 billion, and, respectively, IAC Chairman and Senior Executive Barry Diller and CEO Joey Levin were added to the MGM’s board of directors.

Currently, MGM owns casino properties across multiple US and international jurisdictions, among which the Excalibur, Luxor and Mandalay Bay in Las Vegas and MGM Macau and MGM Cotai in the Special Administrative Region (SAR) of China.

Sports Betting Operations

MGM Resorts, in partnership with GVC Holdings, entered into a joint venture, Roar Digital, to develop the BetMGM sports betting brand and roll it out to states which legalize wagering on sports, a business opportunity that is still under-developed and presents huge potential for the gaming operator.

The retail and online sports betting brand is already live in 8 states, with launches in another 3 expected by the end of the year, as the operator plans to have presence in a total of 20 states by the end of 2021.