MGM Resorts International Sees Financial Flexibility for Multi-Billion-Dollar Projects

MGM Resorts International is well-equipped to pursue multiple ambitious integrated resort developments simultaneously, thanks to its robust financial position. A recent report by CBRE Credit Research notes that the company's decision to refinance USD675 million in debt has pushed its next maturity to 2026, providing valuable financial flexibility. This flexibility will enable MGM to tackle several large-scale projects, including potential developments in New York, Japan, the United Arab Emirates, and Thailand. Analyst Colin Mansfield at CBRE believes that MGM's 'lease-adjusted consolidated leverage remains low at 4.3x' following a recent bond issuance, allowing the company to pursue multiple opportunities in the medium-term.

Key Takeaways:

• MGM Resorts International's decision to refinance USD675 million in debt has pushed its next maturity to 2026, providing additional financial flexibility.
• The company's 'lease-adjusted consolidated leverage remains low at 4.3x' following a recent bond issuance, indicating robust financial health.
• MGM has the financial strength and flexibility to pursue multiple new integrated resort developments simultaneously, including potential opportunities in Thailand, the United Arab Emirates, and New York.
• The company has already begun land preparatory work on a near-USD10 billion integrated resort development in Osaka, Japan.
• MGM's Macau subsidiary, MGM China, will drive any pursuit of a Thailand-integrated resort license.
• Each multi-billion-dollar project will require 'sizeable equity checks,' although MGM can fund these via FCF depending on their ultimate timing.

Statistics:

• USD10 billion: estimated cost of MGM's integrated resort development in Osaka, Japan.
• 4.3x: MGM's 'lease-adjusted consolidated leverage' following a recent bond issuance.
• USD850 million: amount of 6.125% unsecured notes issued by MGM to refinance USD675 million.
• USD675 million: amount of 5.75% notes repaid by MGM in June 2025.
• 2026: year of MGM's next debt maturity.
• 2029: maturity date of USD850 million in 6.125% unsecured notes issued by MGM.

Sources:

• CBRE Credit Research report, 'MGM Resorts: A Stronger Balance Sheet Without Impairing Leverage' (no date provided)
• MGM Resorts International announcement, 'MGM Resorts Prices USD850 Million 6.125% Senior Unsecured Notes Due 2029' (June 1, 2023)
• CBRE Credit Research is a global commercial real estate analysis and research company