Standard & Poor’s outlook for CityCenter is negative

Standard & Poor’s told investors it had a negative outlook on CityCenter, despite the recent offering of
$1.5 billion in new financing.

The ratings service said the 67-acre, $8.5 billion Strip development, which is owned in a 50-50 joint venture by MGM Resorts International and Dubai World, would have trouble generating enough cash flow to justify its current capital structure.

CityCenter includes Aria, its 4,004-room hotel-casino centerpiece.

Standard & Poor’s gave CityCenter a “B-” corporate credit rating, saying the recent refinancing only modestly offset the project’s risks.

CityCenter’s joint venture partnership issued $900 million in notes due 2016 and $600 million in notes due 2017, using the proceeds to pay down its existing debt and extend its due dates.