MGM Resorts Worldwide (NYSE: MGM) has the monetary sources and entry to capital wanted to execute a number of new on line casino resort tasks over the medium time period.
MGM Resorts Worldwide’s rendering of Empire Metropolis in Yonkers, NY. The operator has the monetary sources to execute a number of vital tasks, say analysts. (Picture: MGM Resorts Worldwide)
That’s the take of CBRE Credit score Analysis Colin Mansfield and Connor Parks who in a brand new observe to purchasers stated the gaming firm bolstered its monetary flexibility with the current sale of $850 million of company debt. Some proceeds from that transaction will go towards eliminating the operator’s 2025 maturities, which means it now has no debt coming due earlier than 2026.
The issuance clears out the 2025 maturities at MGM’s home field, with the subsequent maturity being the $400 million due in late-2026,” in line with the analysts. “Lease-adjusted consolidated leverage at MGM stays low at 4.3 occasions pro-forma for the issuance.”
The CBRE duo famous that MGM has the sources to work on a number of large-scale tasks, together with MGM Osaka in Japan, and doubtlessly, changing Empire Metropolis On line casino in Yonkers, NY to a standard on line casino whereas additionally probably pursuing gaming licenses in Thailand and the United Arab Emirates (UAE).
MGM Has Huge Ambitions
Every of the tasks talked about above would seemingly be a multibillion-dollar enterprise. MGM has a 42.5% stake within the Osaka built-in resort scheme, which carries a price ticket of $8 billion, and it might take a number of billion extra to transition Empire Metropolis right into a Las Vegas-style gaming venue if the operator wins one of many three downstate on line casino permits New York regulators might award subsequent yr.
Likewise, a Thai license might price as a lot as $3 billion, relying upon the situation of the venue. MGM beforehand stated its MGM China unit could be the entity to pursue an built-in resort in that nation.
“Every improvement would require multibillion-dollar investments and sizeable fairness checks, although MGM can fund these through FCF (free money movement) relying on their final timing,” noticed the CBRE analysts.
The analysts added that MGM “has steadiness sheet flexibility” ought to it have to concern extra debt to take care of the potential for overlapping timelines on varied tasks. The gaming firm added $175 million to its already sizable cash-on-hand place through the aforementioned bond sale.
The place Dubai Suits in for MGM
MGM executives have constantly stated the corporate could be considering bidding for a gaming license within the UAE if that chance presents itself. Its MGM-branded resort in Dubai is at present structured as a nongaming venue, however CEO Invoice Hornbuckle informed analysts and traders earlier this yr that the operator stated apart house for a on line casino, indicating it might shortly pivot if want be.
Not together with a on line casino, MGM and native associate Wasl Asset Administration Group anticipate to spend $2.5 billion or extra on a three-hotel plan in Dubai. The resorts are anticipated to be reflections of the Aria, Bellagio, and MGM Grand on the Las Vegas Strip.
The operator has 150,000 sq. ft to work with on the Dubai property in relation to including a on line casino, however the firm hasn’t commented on the price of such an addition.
