MGM ‘upsizes’ senior note offering to $750M to boost liquidity
MGM Resorts International will increase a public offering of senior notes from $500 million to $750 million to improve its liquidity during the coronavirus pandemic.
In a prospectus filed Thursday with the Securities and Exchange Commission, the Las Vegas-based company said it has “upsized” its principal amount of 6.75 percent senior notes due 2025 at par.
The offering is expected to close May 4.
The company intends to use the net proceeds from the offering of the notes for general corporate purposes. The filing said the company may invest the net proceeds in short-term, interest-bearing accounts, securities or similar investments.
Earlier in the day, MGM offered a preview of first-quarter earnings, estimating a 29 percent decline in net revenue, including a 21 percent drop for its Strip properties. The company shut down operations nationwide in mid-March and in Macao for 15 days in February.
Deutsche Bank gaming analyst Carlo Santarelli told investors in late March that MGM could withstand a “roughly 10-month closure of its domestic assets before having to resort to further sources of liquidity.”
The increased public offering is expected to provide a greater cushion for the company, which currently is losing about $270 million for each month its resorts stay closed.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
