MGM Resorts to issue $500 million in unsecured debt
Casino giant MGM Resorts International announced plans this morning to issue $500 million of unsecured debt through a private offering that would be due in 2019.
The company, which operates 10 Strip resorts, said it would use the proceeds to pay down older debt. MGM Resorts had $13.45 billion in long-term debt as of Sept. 30.
"In our opinion, this $500 million private offering, while improving liquidity, is a stepping stone towards a larger refinancing of MGM's credit facility, which could positively impact the aggregate cost of capital," Union Gaming Group principal Bill Lerner told investors in a research note.
Lerner said the offering would increase MGM Resorts' debt to almost $14 billion. He said the company's cost-cutting efforts over the past few years eliminated an estimated $500 million in annual costs.
"While most of the heavy lifting is complete, management remains cost conscious and will work towards remaining cost neutral," Lerner said. "The opportunity for continued margin expansion remains one of the primary drivers of future cash flow growth."
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.
