625x395 | 640x404 | 120x76 | 75x75

outlookindiacompluginplay   Image Posted Jul.15th, 2024, viewed 60 times

Fitch Announces Strong Decline in MGM Rating Leverage

Fitch is once again giving casino developer MGM Resorts International and its affiliate MGM China Holdings an issuer default rating (IDR), giving it a "BB-" rating. The outlook for the casino group is "stable" and "reflected Fitch's expectation that MGM's leverage will remain stable and that liquidity is sufficient to fund future growth opportunities," the rating agency said on Monday.

Fitch withdrew MGM's IDR in May 2022, citing "commercial reasons."

In an update on Monday, the agency observed a "strong reduction" in MGM Group's leverage, and said it could reduce earnings before interest, taxation, depreciation, amortization, restructuring or rent expense (EBITDAR) leverage "from 8.4 times in 2021 to 5.5 times in 2023."

"The EBITDA leverage, excluding Lease from debt, improved from 8.6 to 2.8 times over the same period by applying free cash flow and proceeds from asset sales to debt reduction," Fitch added.

MGM China operates casino resort properties MGM Macau (pictured) and MGM Cotai in Macau.

"For both MGM properties, the continued rebound in Macau will support near-term growth," Fitch said.

However, it added: "These positives can be offset by the company's aggressive development plans, revenue volatility from high-end play in both Las Vegas and Macau, increased cost pressures, and a lack of property ownership, impacting financial flexibility while economic conditions deteriorate."

"We did not expect further physical debt reductions during the forecast period," the rating agency said, adding, "We expect EBITDAAR leverage in the 5.0-5.5-fold range."

"Future free cash flow generation and excess cash should allow future growth opportunities and funding for stock repurchases," it added.

MGM Resorts is developing Japan's first casino resort, located in Osaka and due to open in 2030. The group also sought a northern license in New York, USA, and mentioned plans for a non-casino hotel in Dubai, United Arab Emirates.

Separately on Monday, MGM Resorts said it had offered US$750 million for a 6.500% aggregate principal amount of senior bonds due in 2032. The deal is expected to close on April 9, it added.

The casino company said it plans to use the net proceeds provided "to repay existing debt, including 6.750% of its outstanding senior bonds," due in May 2025.

CBRE Capital Advisors Inc. said in a note on Monday that MGM has "good credit momentum with sound operating fundamentals in the country and strong market share gains in MGM China."

"We commend MGM China for its timely refinancing ahead of its May 2025 expiration, in light of its $750 million maturity in two months but not yet refinanced despite having sufficient revolving capacity to address it," analysts Colin Mansfield and Connor Parks wrote.

BY: 에볼루션 바카라사이트

Community Critique