MGM Resorts International Prices $750,000,000 in Senior Notes

Rhea-AI Summary

MGM Resorts International announces a public offering of $750 million in senior notes due 2032 at par, aiming to repay existing debts. The offering is managed by a consortium of top financial institutions, with the transaction set to close on April 9, 2024.

Insights

Financial Analyst

MGM Resorts International's announcement of a significant public offering of senior notes is a strategic move aimed at improving the company's debt profile. The choice to issue notes at 6.500%, which is lower than the existing 6.750% notes due in 2025, indicates an attempt to capitalize on current market conditions to reduce interest expenses. This refinancing could potentially lead to improved net interest margins and lower overall borrowing costs for the company.

Investors and analysts often scrutinize such transactions for their impact on a company's leverage, interest coverage ratios and overall financial health. The use of proceeds to repay existing higher-interest debt is a prudent approach that will likely be viewed favorably by the market, as it suggests a focus on financial discipline and creditworthiness. However, the introduction of new debt also requires careful monitoring of the company's leverage ratios and future cash flow projections.

Debt Market Analyst

The offering of $750 million in senior notes at a 6.500% interest rate reflects the current state of the credit markets and investor appetite for corporate debt. The involvement of a broad syndicate of well-known financial institutions as joint book-running managers and co-managers indicates a robust underwriting process and potentially strong demand for the notes.

From a market perspective, the guarantee by MGM's domestic subsidiaries is a key point, as it underscores the credit quality of the offering. This guarantee structure is common in corporate debt offerings and provides an additional layer of security for investors, aligning with the company's existing senior indebtedness. The equal right of payment clause is also standard, ensuring that these new notes rank pari passu with other unsecured senior debt.

Market Research Analyst

MGM Resorts International operates in the hospitality and entertainment industry, which is sensitive to economic cycles. The decision to refinance existing debt can be seen as a proactive measure to strengthen the balance sheet against potential downturns. By locking in a lower interest rate for a longer maturity, the company might be positioning itself to weather any short-term market volatility while also planning for long-term growth.

It is essential to consider the broader industry context, including tourism trends, consumer spending habits and regulatory changes that could impact MGM's operations. The success of this offering could send positive signals to the market about MGM's financial stability and strategic foresight, potentially influencing the stock's performance and investor sentiment.

LAS VEGAS, March 25, 2024 /PRNewswire/ -- MGM Resorts International (the "Company") (NYSE: MGM) today announced that it has priced a public offering of $750,000,000 in aggregate principal amount of 6.500% senior notes due 2032 at par. The transaction is expected to close on April 9, 2024, subject to customary closing conditions.

The Company intends to use the net proceeds from the offering of the notes to repay existing indebtedness, including its outstanding 6.750% 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.

Deutsche Bank Securities Inc., BofA Securities, Inc., Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Citizens JMP Securities, LLC, Fifth Third Securities, Inc., J.P. Morgan Securities LLC, 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., and Wells Fargo Securities, 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 6.750% senior notes due 2025. Any such notice of redemption will be delivered in accordance with the indenture governing the 6.750% 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 will 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 Deutsche Bank Securities Inc., Attn: Prospectus Group, 1 Columbus Circle, New York, New York 10019, Email: Prospectus.Ops@db.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 ("LeoVegas"), 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; our ability to reduce expenses and otherwise maintain our liquidity position; the Company's ability to generate significant cash flow and execute on its strategic initiatives, including the development of an integrated resort in Japan and investments we make in sports betting and iGaming; amounts we will spend in capital expenditures and investments; our expectations with respect to future share repurchases; and the impact of cybersecurity incidents, including the Company's September 2023 cybersecurity issue. 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 10-K, 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 amount of the public offering of senior notes by MGM Resorts International?

MGM Resorts International has priced a public offering of $750,000,000 in aggregate principal amount of 6.500% senior notes due 2032 at par.

When is the expected closing date of the transaction for the public offering of senior notes by MGM Resorts International?

The transaction for the public offering of senior notes by MGM Resorts International is expected to close on April 9, 2024, subject to customary closing conditions.

What is the intended use of the net proceeds from the offering of senior notes by MGM Resorts International?

MGM Resorts International intends to use the net proceeds from the offering of the notes to repay existing indebtedness, including its outstanding 6.750% senior notes due 2025.

Who are the joint book-running managers for the proposed offering of senior notes by MGM Resorts International?

Deutsche Bank Securities Inc., BofA Securities, Inc., Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., and others will act as joint book-running managers for the proposed offering.

Where can one request the prospectus and final prospectus supplement for the notes offering by MGM Resorts International?

One can request the prospectus and final prospectus supplement for the notes offering by contacting Deutsche Bank Securities Inc., Attn: Prospectus Group, 1 Columbus Circle, New York, New York 10019, Email: Prospectus.Ops@db.com.