Fitch downgrades MGM on reduced financial flexibility, coronavirus

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.”

SHARE
Previous articleParadise Entertainment withdraws from Waldo, reports 2019 results
Next articleSuncity delays HOIANA opening to 2021

Related Articles

MGM ranks 107 in world’s best employers list

MGM Resorts International (NYSE: MGM) was ranked No. 107 on Forbes' list of 750 World's Best Employers for 2020, the only company on the Las Vegas Strip to make the list.

MGM Resorts upsizes notes offering to US$750 million

MGM Resorts said it has upsized a public note offering from $500 million to $750 million and will use the proceeds to refinance existing debt and for general corporate purposes.

MGM to lay off 18,000 furloughed workers

MGM Resorts began laying off 18,000 furloughed workers on Monday as the impact of the pandemic drags on.

The Osaka Yumeshima IR loses its inevitability

A year ago there were many things uncertain about IR development in Japan, but if there was one thing you could depend upon—one prediction that could be made with near total confidence—it was that the man-made island of Yumeshima in Osaka Bay was destined to become host to one of the biggest and grandest IRs in the world. 

MGM not committed to Osaka IR investment

In an earnings conference call held at the end of last week, MGM President and CEO Bill Hornbuckle revealed that his firm was not committed to moving forward with its multi-billion dollar IR investment at Yumeshima, Osaka. “There are a great deal of things to be worked out there,” Hornbuckle stated, “and we’ll only make […]

MGM reports US$1 billion in operating losses for Q2

MGM Resorts International has reported a combined US$1 billion for the quarter ending on June 30 on the back of a 91 percent fall in net revenues. The company statement explained that these losses were “driven by the temporary suspension of the company’s domestic casino operations, continued travel restrictions in Macau, restrictions on the number […]

Hornbuckle confirmed as MGM International president and CEO

MGM International has announced that William Hornbuckle has become the firm’s new president and CEO, effective immediately. He had previously been holding these offices in an acting capacity since March. Hornbuckle succeeds Jim Murren, who first indicated his intention to step down before the expiry of his contract in February. Chairman Paul Salem, who also […]

MGM online unit raises $250m

Roar Digital, a U.S. sports betting and online gaming company, said its shareholders, MGM Resorts and GVC have committed to a second round of investment, bringing the total to $450 million. 

Start-time errors lead to biggest sports book loss in Vegas

Incorrectly entered start times on Korean and Chinese baseball matches lead to a quarter of a million in winning wagers at MGM Resorts over the weekend, in what may be the biggest loss ever in Las Vegas on games that have already started, according to local media reports.

MGM recognized globally and regionally for HR efforts

Casino operator MGM Resorts has announced it has attained seven accolades both regionally and globally in relation to its human resources and talent development efforts. In the first five months of 2020, the company was honored with seven HR awards from four renowned institutions, including the global BEST Award from the Association of Talent Development […]