MGM Resorts International Announces Proposed Senior Notes Offering

Rhea-AI Summary

MGM Resorts International plans to offer $750 million in senior notes due 2032 to repay existing debt, with a lineup of notable book-running managers and co-managers for the proposed offering.

Financial Analyst

MGM Resorts International's decision to issue $750 million in senior notes due 2032 is a strategic move to restructure its debt profile. By aiming to repay the higher-interest 6.750% senior notes due 2025, the company is likely seeking to capitalize on potentially lower interest rates for the new issuance, thus reducing its cost of capital. This could improve its interest coverage ratio and overall financial health, which is particularly important for companies in the hospitality and gaming industry where cash flow stability is essential.

Investors should consider the implications of this debt restructuring on the company's leverage and interest expense. The use of proceeds indicates a proactive approach to debt management, which could be viewed favorably by credit rating agencies. However, the increase in total debt might raise concerns if the new notes carry a higher interest rate than the market anticipates.

Market Research Analyst

In the context of the hospitality and gaming sector, MGM Resorts International's issuance of senior notes can be seen as a reflection of the industry's broader capital management trends. The company's choice to guarantee the notes with its wholly owned domestic subsidiaries suggests a strong commitment to the obligations, which may instill confidence among investors.

It is essential to monitor the demand for these notes, as it will provide insights into investor sentiment towards the company and the industry's creditworthiness. The involvement of prominent financial institutions as joint book-running managers and co-managers indicates a high level of interest in the offering. The outcome of this offering could influence MGM's strategic initiatives and expansion plans, with potential ripple effects across the industry.

Legal Expert

The legal aspects of MGM Resorts International's senior notes offering involve compliance with SEC regulations and state securities laws. The company's adherence to the registration and qualification requirements underlines the legal due diligence performed. Investors should note that the offering is contingent on market conditions and legal considerations and any deviation from the stated use of proceeds could result in legal repercussions.

Furthermore, the equal right of payment with existing or future senior unsecured indebtedness ensures that these notes are not subordinated, which could affect the recovery rates for investors in the event of default. As the offering is made under an existing shelf registration statement, it allows for a quicker response to market conditions, enabling MGM to potentially secure more favorable terms.

LAS VEGAS, March 25, 2024 /PRNewswire/ -- MGM Resorts International (the "Company") (NYSE: MGM) today announced that it proposes to offer $750,000,000 in aggregate principal amount of senior notes due 2032.

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 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 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

What is MGM Resorts International planning to offer?

MGM Resorts International plans to offer $750,000,000 in aggregate principal amount of senior notes due 2032.

How does MGM Resorts International intend to use the net proceeds from the offering?

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.

Who are the joint book-running managers for the proposed offering?

Deutsche Bank Securities Inc., BofA Securities, Inc., Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Citizens JMP Securities, , Fifth Third Securities, Inc., J.P. Morgan Securities , Morgan Stanley & Co. , Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., and Truist Securities, Inc. will act as joint book-running managers.

What will the offered notes be?

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.

Where can one request the prospectus and final prospectus supplement for the notes offering?

You can request the prospectus and the final prospectus supplement from Deutsche Bank Securities Inc., Attn: Prospectus Group, 1 Columbus Circle, New York, New York 10019, Email: prospectus.ops@db.com.