People Inc.’s proposed takeover of MGM Resorts International is expected to have limited immediate operational impact on MGM China, but the deal’s funding structure has emerged as a key uncertainty, according to CreditSights, a credit research firm under Fitch Group.
The main issue is whether the transaction will rely heavily on debt, which could pressure MGM Resorts’ credit metrics and increase downgrade risk. That, in turn, could affect MGM China’s dollar bonds and revolving credit facility, both of which include change-of-control provisions.
MGM Resorts said on June 1st that it had received a takeover bid from People Inc., formerly IAC, which currently owns 26.1 percent of the US casino operator. The offer is priced at $48.30 per share and would increase People Inc.’s ownership of MGM Resorts to just over 50.1 percent.
CreditSights said People Inc. expects to fund the transaction through a combination of cash and additional debt and equity funding commitments. However, MGM Resorts has not disclosed how much debt would be used or provided a possible timetable for the transaction.
CreditSights analysts Nicholas Chen and David Bussey said the lack of detail on debt funding is the more relevant concern. ‘We think the former is more pertinent,’ they wrote, referring to the amount of acquisition debt. They said a largely debt-funded acquisition would likely stretch MGM Resorts’ credit metrics and could create rating downgrade pressure, although the limited transaction details make it difficult to assess the likelihood of a downgrade at this stage.
For MGM China, CreditSights said the direct operational impact should remain limited for now, as any incremental debt would likely be raised at the MGM Resorts level. However, MGM China’s dollar bonds differ from MGM Resorts’ dollar bonds because they include change-of-control protection.
Under the bond terms cited by CreditSights, a change-of-control event would require two conditions: a change in control and a ratings event. The ratings event would occur if Moody’s, S&P or Fitch downgraded MGM China by one notch or withdrew its rating.
CreditSights said People Inc.’s acquisition of more than 50 percent of MGM Resorts’ voting power would likely indirectly make it a beneficial owner of MGM China, given MGM Resorts’ 56 percent stake in the Macau operator. If this were combined with a ratings downgrade or withdrawal, it could trigger a $101 put for MGM China bondholders.
MGM China’s revolving credit facility could also be affected. CreditSights said the company had about $663.3 million outstanding under the facility, which has a total size of HK$23.4 billion ($3 billion). If MGM Resorts ceases to directly or indirectly own more than 50 percent of MGM China, the outstanding loan amount would become immediately due and payable, while the entire facility would be canceled.
The report also noted that MGM China recently refinanced its $750 million 5.875 percent May 2026 bond with a new $750 million 6.25 percent May 2033 bond. As of March 31st, 2026, MGM China had about $918 million in unrestricted cash and about $2.7 billion in total debt, including $2 billion in dollar bonds and $663 million under the revolving credit facility.
CreditSights said MGM China’s liquidity would be insufficient to service the full debt stack, meaning People Inc. would need to put in place a refinancing plan, through debt or other means, to address MGM China’s obligations. The firm maintained its ‘Outperform’ recommendation on MGM China.
