Fitch Ratings has downgraded MGM Resorts International’s and MGM China Holdings’ issuer default ratings as well as their unsecured debt due to “decreased financial flexibility following the recent sale-leaseback transactions as well as the severe disruption to global gaming caused by the coronavirus outbreak.”
Fitch also revised the firms’ rating outlook from stable to negative.
They explained that “the sale and leaseback of Bellagio and MGM Grand, the company’s last two flagship Las Vegas Strip assets, reduce MGM’s liquidity levers vis-à-vis ability to monetize assets and increase MGM’s rent obligations to unaffiliated parties, most notably Blackstone Real Estate Income Trust.”
Fitch also cited “the unknown depth and duration of the coronavirus disruption” and the increased cash burn that this would entail.
However, the ratings agency also noted that “MGM is well positioned from a liquidity standpoint to weather the near-term cash burn, which Fitch anticipates will be funded with cash on hand including the recent asset sale proceeds.”
This Dossier results from the “Life After POGOs” editorial project by Asia Gaming Brief which culminated with a pop-up digital forum on 9th December to discuss potentials ramifications in the industry.
The Yokohama City Council has begun its deliberations on whether or not to hold a popular referendum on IR development. Despite gaining more than three times the needed number of resident signatures, Mayor Fumiko Hayashi has asked that the referendum be rejected.
Over the years, many of the answers have been remarkably prescient in their forecasts for the near-term direction of Asia’s gaming industry. However, we can safely say that no one came anywhere close to guessing
what 2020 may have had in store.
While nowhere in the world has escaped the economic fallout from the Covid-19 crisis, Macau has been hit harder than most, with forecasts for gross domestic product to shrink more than 50 percent this year.