MGM China Holdings’ bonds remain the preferred choice among high-yield Macau gaming operators following the company’s strong fourth-quarter 2025 performance, according to a recent CreditSights research report.
In its latest investment memo, CreditSights, a credit research unit under the Fitch Group, maintained an ‘Outperform’ recommendation on MGM China after the company reported solid revenue and earnings growth, supported by improved credit metrics and stronger-than-expected operating results.
Analysts Nicholas Chen and David Bussey said MGM China’s financial performance in the fourth quarter ‘remained far above pre-COVID levels,’ with total net revenues and EBITDA rising 21 percent and 30 percent year-on-year, respectively.
The research noted that earnings growth was largely driven by MGM Cotai, which contributed the majority of topline expansion and lifted the company’s EBITDA margin by 1.8 percentage points to 28.6 percent. The analysts added that they expect ‘a mid-single-digit year-on-year increase in the topline’ in fiscal year 2026, supported by operational improvements and the completion of suite conversion efforts.
CreditSights also noted continued balance sheet strengthening. As of December 31st, 2025, MGM China’s total debt stood at $2.5 billion, while gross leverage improved to about 1.95 times, remaining ‘comfortably stronger than pre-COVID levels’. The analysts estimated that free cash flow remained positive in 2025 and projected further marginal improvement in 2026.
From a relative value perspective, CreditSights said MGM China’s bond yields trade about 30 basis points tighter than comparable Wynn Macau debt, which it believes is justified by ‘stronger credit fundamentals and impressive post-pandemic gains in market share’. The firm also reiterated its preference for MGM China over Melco Resorts and Studio City, citing concerns over deleveraging progress and shareholder returns at peers.
For investors seeking higher yields, the analysts highlighted the 7.125 percent MGM China June 2031 bond, while noting the likelihood of early refinancing due to its call structure.
