MGM Resorts: another 1 billion notes in new debt

It was second time in this year, when MGM Resorts International had priced USD 1 billion in its new unsecured debt. According to the officials, the 6.75 percent notes are going to be due in 2020.

Earlier, the operator announced that it was in pursuit of USD 700 millions in new debt. However, later, they kicked the figure up by another USD 300 million. It is believed that the transaction is going to close on Wednesday.

In the month of March, MGM was able to raise USD 1 billion in 10-year unsecure bonds at a rate of 7.75 percent. This figure of interest rate was the lowest that the company saw for 5 years.

According to the statement issued by MGM Resorts, the net proceeds from the amount are going to be used for repaying the indebtedness of the company. This includes indebtedness under its outstanding debt securities and senior credit agreement.

Currently, the company is carrying a long term debt of USD 13.4 billion, which makes it second in the casino world.

According to Moody’s Investor Service, this move gave positive vibes. Following the announcement made by the casino operator, they said that the net proceeds are going to strengthen the company’s balance sheet.

There are ten strip resorts under MGM, which include MGM Grand, Bellagio and The Mirage. They have a 50% stake in the City Center as well.

Peggy Holloway, analysts at the Moody, said in a statement, “The proposed note brought about by MGM seems another positive step for refinancing the debt maturities, which are to take place in the coming couple of years.”

It is believed that the company is currently having a USD 1.3 billion in long term debt, which is going to expire in the coming year.

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