Fitch says MGM credit profile improving

Fitch Ratings has reaffirmed the credit rating of MGM Resorts and its MGM China unit, saying the group’s credit profile is improving.

In a press release, Fitch reaffirmed the group’s long-term issuer default ratings, as well as MGM’s senior secured credit facility and senior unsecured notes. The rating outlook is stable for all entities, it said.

The ratings firm said it expects MGM Resorts’ debt levels to decline to below 5.0x by the end of next year as its EBITDA improves, MGM Cotai ramps up, MGM Springfield opens and Empire City is acquired. MGM Cotai will gain market share and generate nearly $350 million in incremental EBITDA for the group, it said.

“MGM’s free cash flow profile is also improving, set to reach $1.3 billion-$1.4 billion annually by 2019. Upward credit momentum may be slowed by a new large-scale, heavily debt-funded project or a pullback in U.S. economic growth,” it said.

The group has also improved its geographic diversification and Fitch said it has a positive view on its new developments, as well as the Las Vegas Strip, which accounts for about 60 percent of the group’s total revenues.

“The Strip should benefit from continued strength in the convention business and limited new lodging supply.”

In Macau, Fitch said it expects gross gaming revenue to rise 14 percent this year. The ratings agency said it believes the government will be “pragmatic” when it comes to concession renewals as it values stability in the marketplace.

 

Related Articles

Macau operators make CSR push amidst coronavirus crisis

As the Covid-19 crisis descended upon, first, China, then the world, the six Macau operators have not been idle in their CSR efforts, in spite of the mandated casino closures and reopenings under difficult economic conditions.

Economic toll deepens, but underlying optimism intact

The Coronavirus, now renamed as Covid-19, has devastated the near-term outlook for Asia’s casino operators, though analysts still expect demand to snap back sharply once the outbreak is under control. The big question is when that might be.

MGM China/Melco announce bonus for non-management staff

MGM China and Melco Resorts & Entertainment have announced they will pay a bonus equivalent to one-month's salary to all eligible non-management employees.

MGM China says no plans for restructuring

MGM China said it currently has no plans to restructure its operations, responding to a letter from investor Snow Lake Capital urging the company to sell a 20 percent stake to a Chinese internet or leisure firm.
ladbrokes

MGM’s Entain bid may create “butterfly effect” in Asia

It’s been anything but a slow start to the New Year. While only in its embryonic stages, MGM Resorts International’s bid for the U.K.’s Entain has the potential to trigger a chain of events that could have wide reaching implications for gaming in Asia.

Snow Lake Capital urges MGM to sell 20% of its China business

Investment firm Snow Lake Capital has urged MGM Resorts in an open letter to sell 20 percent of its China business to a strategic partner, calling it a “win-win transaction” for all. The firm owns roughly 7.5 percent of MGM China Holdings.
Sands Parisian

Can staycations save Christmas?

As we near the end of a tourism-free year, the industry is gearing up for one last push to salvage annual revenue with a round of campaigns to capitalize on the upcoming holiday season. Reliance on locals and “staycation” marketing have been a theme of the year, with varying degrees of success around the region.
Hong Kong Stock Exchange

Operator stocks fall as Covid clusters reemerge

After the vaccine-induced stock euphoria earlier this month, Covid-19 has returned to dampen investor enthusiasm.
Ho Iat Seng

Macau gaming law revision not likely until late 2021

Consolidation of the bases and advancement in adversity was the thrust of Macau Chief Executive’s policy address for 2021, though it gave little away when it came to the current pillar of the economy - the gaming industry. 

Yokohama appears headed for IR referendum showdown

If current trends hold, there will soon be a referendum in Yokohama, which will bring an end to what is currently anticipated to be the largest IR development in Japan.