MGM China seeks $2B loan amidst growth spurt: Report

Macau gaming operator MGM China is in discussions to secure a syndicated loan of approximately $2 billion, according to Bloomberg, citing sources familiar with the matter.

The report indicates that the gaming operator is negotiating with more than a dozen banks for a five-year facility denominated in Hong Kong dollars. If finalized, this would be the group’s first syndicated loan since the beginning of the pandemic, based on Bloomberg’s compiled data.

Sources added that the funds raised are expected to be used primarily for refinancing. However, MGM China remains in active discussions with lenders, and the terms of the deal could change.

An analyst from a top international investment bank, who prefers to remain anonymous, told AGB that the loan facility is unlikely to be used for expansion plans but rather for normal financial operations. He noted that in 2023, MGM extended the maturity date of some notes to mid-2026.

The analyst believes this move is in line with maintaining the company’s financial flexibility and refinancing its upcoming maturing notes.

This comes as MGM has been among the fastest-growing gaming operators in Macau in recent years. According to press releases dated February 13th, MGM China reported an all-time high market share of 15.8 percent in 2024, up from 15.2 percent in 2023 and a significant rise from 9.5 percent in 2019.

The company is reportedly considering upgrading its Macau casino resorts to attract a broader customer base beyond its traditional high-rollers. This strategic move aims to diversify its clientele and capitalize on the region’s post-pandemic recovery.

As AGB confirmed, MGM China’s most recent development, revealed in September of last year, was the conversion of MGM Macau junket areas into villas. This involved creating 28 villa units and turning 200 hotel rooms at its MGM Cotai property into 88 suites.

For FY24, MGM China’s total revenue grew by 27.2 percent to HK$31.4 billion ($3.92 billion), while adjusted EBITDA was up by 25.2 percent to HK$9.06 billion ($1.13 billion).