Macau gaming operator MGM China listed $500 million of 7.125 percent senior notes due 2031 on Thursday, June 27th.
According to a filing with the Hong Kong Exchange, the notes will be available to professional investors only.
In a previous dispatch issued by Moody’s Ratings, the agency assigned a rating of B1 to the notes, adding that this refinancing will not increase the company’s overall debt levels, as the funds will replace existing debt that was recently repaid. A Moody’s B1 rating represents a ‘speculative and high credit risk investment’.
The rating agency cited the company’s large scale, strong Las Vegas presence, and favorable long-term outlook for its Macau operations as strengths. However, MGM’s high leverage, including significant lease obligations, remains a constraint on its rating.
Factors that could lead to an upgrade include consistent positive free cash flow and lower debt levels, while downgrades could occur if EBITDA declines or liquidity deteriorates.
MGM China reported a record high adjusted EBITDA of HK$2.5 billion ($320 million) in the first quarter of 2024, up 77.3 percent year-on-year and 155 percent from the first quarter of 2019.
