MGM Resorts International Announces Proposed Senior Notes Offering

Rhea-AI Summary

MGM Resorts International (NYSE: MGM) has announced a proposed offering of $675 million in senior notes due 2029. The company plans to use the net proceeds to repay existing debt, including its outstanding 5.750% senior notes due 2025. The new notes will be general unsecured senior obligations, guaranteed by most of MGM's wholly owned domestic subsidiaries.

The offering will be managed by a group of prominent financial institutions, including BofA Securities, J.P. Morgan Securities, and Barclays Capital. MGM Resorts, an S&P 500® global gaming and entertainment company, operates 31 unique hotel and gaming destinations globally and is involved in sports betting and online gaming through its venture BetMGM,

Positive

• Raising $675 million through senior notes offering
• Repayment of existing debt, potentially improving financial structure
• Strong backing from major financial institutions as joint book-running managers

Negative

• Increasing long-term debt obligations
• Potential impact on future cash flows due to new debt service requirements

Financial Analyst

MGM Resorts' proposed $675 million senior notes offering is a strategic move to refinance existing debt, specifically targeting the 5.750% senior notes due 2025. This debt restructuring could potentially lower interest expenses and extend maturity, improving the company's financial flexibility. The unsecured nature of these notes, backed by subsidiaries, suggests confidence in MGM's overall financial health. However, investors should note that while this may optimize the debt structure, it doesn't reduce the company's total debt burden. The involvement of multiple high-profile underwriters indicates strong market interest, potentially leading to favorable pricing terms for MGM. This financial maneuver aligns with the company's broader strategy of maintaining a robust capital structure to support its diverse gaming and entertainment portfolio.

Market Research Analyst

MGM's debt offering comes at a important time for the gaming and hospitality industry, which is experiencing a post-pandemic resurgence. The company's ability to secure this offering reflects investor confidence in the sector's recovery and MGM's market position. With 31 properties globally and a strong presence in Las Vegas, MGM is well-positioned to capitalize on the rebound in tourism and entertainment spending. The expansion into online gaming and sports betting through BetMGM and European ventures demonstrates MGM's adaptability to evolving consumer preferences. This diversification strategy, coupled with the company's focus on sustainability and community impact, could enhance its appeal to a broader investor base, potentially supporting long-term stock performance. However, investors should monitor how geopolitical tensions and economic uncertainties might affect tourism and discretionary spending in key markets.

LAS VEGAS, Sept. 3, 2024 /PRNewswire/ -- MGM Resorts International (the "Company") (NYSE: MGM) today announced that it proposes to offer $675,000,000 in aggregate principal amount of senior notes due 2029.

The Company intends to use the net proceeds from the offering of the notes to repay existing indebtedness, including its outstanding 5.750% senior notes due 2025. Pending such use, the Company may invest the net proceeds in short-term interest-bearing accounts, securities or similar investments.

The notes being offered will be general unsecured senior obligations of the Company, guaranteed by substantially all of the Company's wholly owned domestic subsidiaries that guarantee the Company's other senior indebtedness, and equal in right of payment with all existing or future senior unsecured indebtedness of the Company and each guarantor.

BofA Securities, Inc., J.P. Morgan Securities LLC, Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Citizens JMP Securities, LLC, Deutsche Bank Securities Inc., Fifth Third Securities, Inc., Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and Truist Securities, Inc. will act as joint book-running managers and Goldman Sachs & Co. LLC, PNC Capital Markets LLC, U.S. Bancorp Investments, Inc., Wells Fargo Securities, LLC, CBRE Capital Advisors, Inc. and Valtus Capital Group, LLC will act as co-managers for the proposed offering.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. This press release shall not constitute a notice of redemption with respect to the 5.750% senior notes due 2025. Any such notice of redemption will be delivered in accordance with the indenture governing the 5.750% senior notes due 2025.

The offering of the notes will be made under a prospectus supplement related to the notes and an accompanying prospectus filed as part of the Company's existing effective shelf registration statement on file with the Securities and Exchange Commission ("SEC"). The Company intends to file a final prospectus supplement with the SEC for the notes offering to which this communication relates. Alternatively, the Company, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and the final prospectus supplement if you request it from BofA Securities, Inc., NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC 8255-0001, Attn: Prospectus Department, Email:  dg.prospectus_requests@bofa.com.

About MGM Resorts International 

MGM Resorts International (NYSE: MGM) is an S&P 500® global gaming and entertainment company with national and international locations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 31 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. The Company's 50/50 venture, BetMGM, LLC, offers sports betting and online gaming in North America through market-leading brands, including BetMGM and partypoker, and the Company's subsidiary, LV Lion Holding Limited, offers sports betting and online gaming through market-leading brands in several jurisdictions throughout Europe. The Company is currently pursuing targeted expansion in Asia through the integrated resort opportunity in Japan. Through its "Focused on What Matters: Embracing Humanity and Protecting the Planet" philosophy, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests, and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®.

Forward Looking Statements 

Statements in this release that are not historical facts are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and/or uncertainties, including those described in the Company's public filings with the SEC. The Company has based forward-looking statements on management's current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to: completion of the senior notes offering; the Company's expectations regarding any benefits expected to be received from the Company's recent transactions, including the transactions with Push Gaming, Tipico, Playtech and the long-term license agreement with Marriott International; future results of the Company (including the Company's ability to maintain a strong balance sheet), and its unconsolidated affiliates, including BetMGM; expectations regarding the impact of macroeconomic trends on the Company's business; expectations regarding the Company's booking pace, liquidity position and the size and timing of future investments, including capital investments in the Company's properties; the Company's ability to execute on its strategic plans, including the development of an integrated resort in Japan, expansion of LeoVegas and the BetMGM brand in regulated markets, including Latin America, development of proprietary iGaming content and live casino content, and positioning BetMGM as a leader in sports betting and iGaming (including expectations regarding BetMGM's projected market share and profitability); expectations regarding the performance of MGM China and continued payment of the MGM China dividend; and the Company's ability to return capital to shareholders (including the timing and amount of any share repurchases).

These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include: the effects of economic conditions and market conditions in the markets in which the Company operates and competition with other online gaming and sports betting operators and destination travel locations throughout the United States and the world; the design, timing and costs of expansion projects; risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions; and additional risks and uncertainties described in the Company's Form 10K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

MGM RESORTS CONTACTS:

Investment Community: 
SARAH ROGERS, Senior Vice President of Corporate Finance
(702) 730-3942, srogers@mgmresorts.com 

ANDREW CHAPMAN, Director of Investor Relations 
(702) 693-8711, achapman@mgmresorts.com  

News Media: 
BRIAN AHERN, Executive Director of Communications media@mgmresorts.com 

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SOURCE MGM Resorts International

FAQ

What is the purpose of MGM's $675 million senior notes offering?

MGM Resorts International (NYSE: MGM) intends to use the net proceeds from the $675 million senior notes offering to repay existing indebtedness, including its outstanding 5.750% senior notes due 2025.

When are MGM's newly proposed senior notes due?

The senior notes proposed by MGM Resorts International (NYSE: MGM) are due in 2029.

Who are the joint book-running managers for MGM's proposed notes offering?

The joint book-running managers for MGM's proposed notes offering include BofA Securities, J.P. Morgan Securities, Barclays Capital, BNP Paribas Securities, Citigroup Global Markets, and several other prominent financial institutions.

How many hotel and gaming destinations does MGM Resorts International operate globally?

MGM Resorts International (NYSE: MGM) operates 31 unique hotel and gaming destinations globally.