MGM has funding flexibility for new projects globally

MGM Resorts International has the financial strength and flexibility to pursue multiple new integrated resort developments simultaneously, including potential opportunities in Thailand, the United Arab Emirates, and New York, according to a recent report by CBRE Credit Research.

The commentary from CBRE follows MGM’s announcement last week that it would issue USD850 million in 6.125% unsecured notes due in 2029, with the proceeds used to refinance USD675 million in 5.75% notes, maturing in June 2025. This move has pushed MGM’s next debt maturity to 2026, providing the company with additional financial flexibility.

In the note, analyst Colin Mansfield wrote that MGM’s “lease-adjusted consolidated leverage remains low at 4.3x” following a recent bond issuance that boosted liquidity. This financial flexibility allows MGM to “pursue several large-scale developments in the medium-term,” including potential projects in New York, Japan, and the United Arab Emirates.

“Management also expressed its interest in pursuing a development in Thailand, which could be pursued out of the MGM China entity,” Mansfield added. Each multi-billion-dollar project would require “sizeable equity checks, though MGM can fund these via FCF depending on their ultimate timing.”

The additional USD175 million of cash added to MGM’s balance sheet through the recent bond issuance does not move the needle, given the company’s substantial existing liquidity, according to the CBRE report. MGM Resorts has already begun land preparatory work on its near-USD10 billion integrated resort development in Osaka, Japan, and has also confirmed that any pursuit of a Thailand-integrated resort license would be driven by its Macau subsidiary, MGM China. Victoria Chan